AMP is worth more, page-68

California-based private equity and credit investment giant Ares Management is in talks to buy Australian wealth manager AMP Ltd.
It is understood Ares made an indicative offer to acquire AMP Ltd in full in recent weeks, and has been given access to a data room and due diligence materials to firm up its bid.
The offer is understood to value AMP well north of $5 billion and would be the first big Australian play for Ares, which is run locally by former Credit Suisse Australia chief executive and senior investment banker John Knox.
Sources said Ares had tapped Morgan Stanley for help with the due diligence, while new AMP chairman Debra Hazelton and her board were keen to explore the potential takeover and were represented by Credit Suisse and Goldman Sachs.
It would be a huge and contrarian move by Ares, which has about $150 billion in assets globally across its private equity, credit, real estate and special situations investments divisions.
Ares is a big name in global capital markets but is little known in Australia. The group was founded in 1997 by a bunch of dealmakers who previously worked for Apollo Global Management.
Ares has a bunch of Australian investors, including the Future Fund which uses Ares to make high yield debt investments on its behalf, and a distribution deal with local funds manager Fidante Partners, which is owned by Challenger.
It is not known whether Ares is bidding alone or as part of a consortium. AMP has four distinct business units; wealth management, AMP Capital, AMP Bank and New Zealand.
It would be a bold move to acquire AMP, which has one of Australia's largest superannuation funds and is one of the biggest employers of financial advisers, but is under intense shareholder pressure.
AMP has jumped from scandal to scandal in recent years, including at its prized AMP Capital funds management arm and in its financial advice business, and is under pressure to try to turn the ship around for investors.
That pressure culminated in a portfolio review, announced by chairman Debra Hazelton in September, and that was designed to consider all options - a full company sale, divestments, closing business units and the like. That review is ongoing, sources said.
more to come