By Danny John
National Australia Bank has been given another six weeks to try to sort out a deal with the competition regulator over its plans to buy fund manager AXA Asia Pacific for $14 billion.
The bank will use the much needed breathing space up to July 15 to seek a resolution to the concerns raised by the Australian Competition and Consumer Commission which blocked the proposed takeover of AXA AP in mid-April.
The length of the additional negotiating period suggests that NAB is hopeful it can reach a deal with the ACCC over the bank's control of retail investment platforms which stymied its initial proposal.
NAB is understood to have proposed to the regulator that it would be prepared to sell AXA AP's North platform in order to reduce its influence in that part of the sector. NAB already owns one of the industry's major platforms, Navigator, which it acquired through its purchase of Aviva Australia last year.
Today's announcement by both NAB and AXA AP that the bank has until mid-July to continue the talks came after the expiry of the exclusivity clause the two had agreed back in March which prevented the wealth manager from soliciting a rival bid.
That was struck to keep AXA AP at arms length from its previous suitor AMP which had originally planned to buy the Melbourne-based group in conjunction with its major shareholder, the French company AXA SA.
The exclusivity agreement ran out at midnight last night and it could have opened the way for AXA AP to negotiate with AMP or another suitor.
However, both NAB and AXA AP in recent weeks have intimated their preference for their agreed deal to continue if NAB was able to circumvent the ACCC's concerns.
In a statement released to the ASX this morning, AXA AP said it and the bank had agreed to the extension to the end of the day on July 15 to allow NAB to try to reach a deal with the regulator.
“NAB is currently in discussions with the ACCC to determine whether [its] concerns can be addressed,” the statement added.
The developments had been flagged by BusinessDay over the past two days.
Today's moves indicate that while AXA AP and its French partner are prepared to give some latitude to NAB, they are also both looking to bring the drawn out proceedings to a close.
AXA SA, which will buy AXA AP's expanding Asian wealth management operations for $9.6 billion if the deal proceeds, began talking with AMP early last year before the two announced their proposed takeover just over six months ago.
That bid was subsequently trumped by NAB which secured the support of AXA AP's board with an all-cash element to its offer – something that AMP was unable to do. The AMP bid has since lapsed and to revive it the Sydney fund manager would need to put more cash on the table to get the support of AXA AP's directors.
However, it has the benefit of knowing that the ACCC has cleared any new offer it would be able to make given its preference to see a merged AMP and AXA AP become a new ''fifth pillar'' in Australian wealth management to take on the power of the big banks including NAB.
djohn@smh.com.au