Ann: AMP announces new Board appointment, page-20

Macquarie in talks to buy AMP Capital New Zealand business

More asset sales appear to be in the works at AMP, with Macquarie Group in talks to buy the AMP Capital New Zealand operations, according to sources.

The operation offers investment management services in New Zealand equities, with clients including corporate superannuation schemes, KiwiSaver funds, Maori groups, local bodies, insurance providers, trusts and charitable trusts.

Macquarie has in recent years been a suitor for all of AMP, initially looking at a consortium bid with global buyout fund Kohlberg Kravis Roberts.

But it later lost interest.

Its focus was understood to be on the AMP Capital division.

When global buyout fund Ares Management made a bid for AMP last year in a cash and scrip offer that valued the company at $6.4bn, the Australian listed financial group then tested buyer interest for all or parts of the business.

The understanding was that Ares, which counts former Credit Suisse Australia and New Zealand boss John Knox as a top executive, was most keen on the AMP Capital division also, and had a plan to find buyers for AMP’s wealth management and banking operations.

Macquarie was approached at that time by both Ares and AMP’s advisers, Credit Suisse and Goldman Sachs.

They were testing Macquarie’s interest in the AMP bank, but it was lukewarm at best.

Ares later put an offer on the table for only part of AMP Capital, but the negotiations collapsed.

AMP’s chief executive at the time, Angelo de Ferrari, resigned and the company decided to consider a demerger of AMP Capital’s private market business instead.

The AMP Capital public markets operation has been subject to a sale process, and as earlier reported by this column, the world’s largest investment manager, BlackRock, has been in talks about buying the Australian public markets operation, which is the bulk of the business.

Challenger also took a look, but was unable to meet AMP’s price expectations, thought to be about $500m.

There is also talk in the market that AMP will soon revisit the sale of its New Zealand wealth management division after earlier attempts to find an acquirer.

Most expect the business to sell for about $500m.

Last year, Credit Suisse and Jarden were working on a sales process for the unit.

Also for sale by AMP, as earlier reported by this column, is the sale of its IPAC Securities business, which it inherited through its acquisition of Axa Asia Pacific.

Axa Asia Pacific reportedly purchased the Australian funds management advisory operation in 2002 for $205m.

It is understood that an information memorandum is currently in the market for the unit and price expectations are around $200m.

There is also talk in the market that further provisions of up to $1bn could be looming for AMP, which has suffered from poor performance and staff departures.

Chairman Debra Hazelton is thought to be keen to get money through the door, and the New Zealand division has always been seen as non-core for AMP.