AMP, Ares deal heading into extra time [IMG] AMP and suitor for...

AMP, Ares deal heading into extra time



AMP and suitor for the bulk of its prized capital division, Ares Management, are up against time pressures on sealing a binding deal, and are leaning toward an extension of a key exclusivity period.
This column understands the parties are close to sealing a short extension of the exclusive negotiating period to form a joint ownership structure for AMP’s private markets business.
A delay will leave long-suffering AMP shareholders jittery, given a tumultuous three year period for the wealth and asset management group.

AMP and Ares had been hoping to have a binding agreement to cover the latter buying a controlling stake in AMP’s private markets business by the end of a 30-day exclusivity period, but negotiations are dragging on and there are still key matters to be resolved.
An announcement on whether the parties would secure a binding transaction had been expected on or before March 29, which is the first business day after the end of a 30-day exclusivity period.
An AMP spokesman declined to comment on the deal.

But ructions in AMP’s real estate unit have complicated the deliberations, as two funds assess removing AMP as the manager.
Those headaches include the AMP Capital Diversified Property Fund, where an independent board committee has recommended a proposal to merge with the Dexus Wholesale Property Fund.
AMP Capital has put forward an alternative proposal to the merger, and any transaction is subject to a vote of fund unitholders.
The indicative transaction terms for the Ares transaction were outlined by 172-year-old AMP late last month, and would see the US firm acquire 60 per cent of the $2.25bn joint venture and take management control. AMP would own the remaining stake.

Ares in February abandoned its $6bn-plus whole of company bid for AMP to focus on the lucrative private markets segment of the capital division. Private markets spans areas including infrastructure and real estate.
The deal negotiations are happening as Hazelton has been meeting AMP shareholders and proxy advisers ahead of an annual general meeting next month. She is talking through the proposed Ares deal, and is also gauge any concerns as the group looks to avert a second strike against its pay report.
Hazelton is being flanked by the head of AMP’s remuneration committee, Michael Sammells, and group executive of people Helen Livesey in those talks.
AMP’s long term performance hurdles and incentive system, as part of proposed board changes to remuneration structure, are also being discussed. They seek to address concerns from the 2020 AGM.