AMP is mulling a higher cash bid for rival fund manager AXA Asia Pacific as it increasingly pins its takeover hopes on the competition regulator hindering the current front-runner offer from National Australia Bank.
While the investment community is split over whether AMP can come back with a better deal to tempt AXA AP's hostile board, Craig Dunn, chief executive of the Sydney-based financial combine, yesterday hinted strongly that a counter-proposal was in the offing.
The latest twist in the AXA saga came as AMP unveiled a 27 per cent rise in net annual profit to $739 million thanks largely to a recovery in financial markets in the second half and the resulting flow through its superannuation business.
However, underlying earnings - which exclude investment market volatility and give a truer picture of its performance - were down 5 per cent at $772 million.
This led to the final dividend being held at 16¢ a share, which made it 30¢ for the year, down 10¢ on 2008. The dividend is only 50 per cent franked because of the share of foreign income. AMP shares fell 11¢ to $6.16.
Questioned, at the release of the results, about AMP's lapsed $6.24-a-share cash-and-scrip offer for AXA AP, Mr Dunn said: ''The more the circumstances continue to change, the more the time moves on, the more flexibility we have on the bid.''
AMP's last bid - which Mr Dunn had declared ''best and final'' - was topped by NAB's all-cash proposal worth $6.43 a share, which gained the support of AXA's directors.
NAB's offer continues to support AXA AP's relatively soft share price, which yesterday clawed back 6¢ of recent losses to close at $6.38 in the wake of its full-year results announcement and Mr Dunn's comments.
Analysts at RBS said that based on AXA's rise in annual net profits to $679 million on Wednesday, AMP could afford to pay up to $6.80 a share in cash for its target, based on a capital raising of $1.5 billion to fund the takeover.
Mr Dunn refused to be drawn on such a move.
The AMP chief suggested yesterday that the investigation of the offers for AXA by the Australian Competition and Consumer Commission might have tipped the balance slightly in AMP's favour despite the better cash value of NAB's recommended bid.
In a statement of issues last week that pushed out a decision on the respective offers to next month, the ACCC hinted that NAB might encounter greater hurdles given the big four banks' increasing grip on the wealth management industry.
