AMP has been given renewed hope that it remains a serious contender to acquire fund manager AXA Asia Pacific after its one-time French partner in its multibillion-dollar takeover proposal said it was still prepared to do a deal with the Australian group.
The Sydney-based wealth manager has also been given a boost by the long time it is taking for National Australia Bank and AXA SA of France to conclude an agreement to split the operations of AXA AP between them.
While NAB and the French company - which owns 54 per cent of AXA AP - said at their latest financial results presentations their negotiations were proceeding, they were unable to say whether they had made substantial progress towards a deal.
NAB needs an in-principle arrangement to sell AXA AP's valuable Asian operations to AXA SA for $9.6 billion to get its agreed offer past first base so it can then be voted on by the fund manager's minority shareholders.
If it gets both the investors' and the competition regulator's approval, NAB will pick up AXA AP's Australasian business for $4.6 billion.
NAB trumped AMP's original move on AXA AP with a slightly higher bid in December. But the bank had to wait until an exclusivity arrangement between AMP and the French governing their dual offer for AXA AP ran out early this month before opening its own talks with AXA SA.
Those negotiations have been going on for almost a fortnight. NAB chief executive Cameron Clyne told investors at a trading update yesterday that work to finalise its proposal was ''ongoing'' but he would not go into more details.
He did reveal that the plan to merge AXA AP with NAB's MLC wealth management business had first been put forward in 1997 and had remained a long-standing ambition.
As for the French, AXA SA chief executive Henri de Castries told investors at his company's annual results briefing in Paris on Thursday night that the purchase of the Asian operations was a strategic priority and that he was ''very confident for a positive outcome''.
But he also said AXA SA was prepared to offload its offshoot's Australian and New Zealand divisions to either NAB or AMP. He said that while the terms of the Asian division acquisition with NAB were unchanged from the AMP proposal, the timing to finalise the takeover was still uncertain.
NAB doesn't expect that to happen until May or June and needs to overcome any competition hurdles that may be set by the Australian Competition and Consumer Commission.
But that extended timetable may work in the bank's favour because it could tap more of its internally held capital to pay for its portion of the deal instead of raising as much as $1.5 billion from shareholders, as it originally planned.
NAB finance director Mark Joiner said its level of tier-1 capital could drop from 9.3 per cent of risk-weighted assets to about 8 per cent, depending on regulatory requirements, which would free more cash to pay for AXA AP. But he said a decision on the amount would only be taken closer to the deal's conclusion.
