Just for the record, I requested that both of my deleted posts be deleted as they were causing unintended offense
I am not sure why one shows it was deleted for another reason as I made that request at same time - actually just before the other one.
In terms of history of volatility of AMP shares and what happens when there takeover rumours after a stock has been oversold, have a look at AMP share price August 8, 2003 - $2.33. 6 months later it was $7.70. I must add that 14 months before it was over $8. This was when Andrew Mohl was saving the place from the overseas investments and the GIO.
There were different or more factors at play then driving the price up and down. Multiple potential buyers were on the table. AMP was and is a high beta stock as profit reacts to the market ups and downs. And buyers or the market could not easily value AMP due to the overseas assets. The GIO purchase was costing money. Insurance profitability was potentially higher but uncertain. But then again some of the factors are in play this time. They are just on a smaller scale of swings in value believe it or not.
So while I do not suggest swings like this are going to happen this time, it was interesting to see the history for same company.
I also remember that some potential purchasers back then were hoping that something like $4 or $5 would do the deal. AMP was never going to accept a firesale price. This helped drive the price back up.
An interesting excercise is to work out what price you would support the board agreeing to seek out for. There will be a wide range for shareholders as many will base it on entry price more than they should. We are only human. Is $4, plus a 37 cent capital return excite us? It is a big dividend plus 50% gain on today.
And will someone stump up $12 billion? I reckon this means that a purchaser needs to get a $1 billion profit and synergy benefit just to breakeven at a cost of capital of 8%. That would be easily doable. I reckon I would be targeting another $500m of benefit within a few years to justify such a price.
Macquarie are pretty clever. They could create a new entity merging parts of Macquarie and AMP and exchanging AMP equity for equity in the new merged business.
(20min delay)