axa takeover, page-25

Hi Speculator.

Here are my concerns with NAB trying to take over AXA.

1) They are not getting a bargain, They paying pretty high price and the fact that AMP is considering to pay more does not changhe the fact. Just think about Westfarmers buying Coles at the top of the market or Rio Tinto buying Alcan.
Westfield is still trying to make a dollar out of Coles and Rio almost fell to the Chinese interest, eventualy ended up with very diluted capital and earnings per share have been affected.
NAB already stated that AXA would not make positive contribution to profit until about 2 years down the track.
I say AXA would make a negative contribution due to integration cost.

2) NAB should be a bank, not a wealth manager. They already have MLC and they have taken over Aviva in their drive to become the bigest bank based wealth manager and want to increase their market share by buying AXA. But the business is totaly different. The financial planners are fairly independent and can walk at the drop of the hat. NAB does not have them by the curlies like their have their banking staff.
Also the wealth management is about to undergo a major restructure. Main objective is to reduce costs and fees - read funds profits.
It actualy make better sense for AMP to own AXA, at least they are in the same business.

3) NAB is having enough on its plate ATM - integrating Aviva, keeping the UK banks Clysdale and Yorkshire out of trouble - and realy need AXA like a hole in the head.

4) NAB is not buying AXA with profits they made, they intend to go to you and me, the shareholders to do a SPP to pay for this joke. And they already said that they do not intend to be generous, about 8% discount on the market price at the time. Well by the time the shares are delivered, you can bet the market price will drop ten percent.

5) One day before they announced their intentions re AXA the SP was over $28. After the announcement the SP droped about $2 from memory and never recovered since, they still limping behind the other banks with their bravado.

6) ACCC - the competition watch dog does not have problem with AMP buying, but stated that it sees problems with NAB buying AXA.

IMO NAB should stop floging the dead horse and get on with a business of being a bank.

Brian