AXA Australia’s half yearly results have been overshadowed with a bombshell announcement of a takeover of the remaining independently owned shares in the local operation by the groups French parent AXA SA.
AXA SA is proposing to buy the 48.3 per cent stake for $3.75 a share which is a 14.3 per cent premium over yesterday’s (August 5) share price.
Any payment would be reduced by dividends paid between now and a formal takeover.
AXA SA is proposing to pay shareholders with 50 per cent cash and the rest in AXA SA shares which are listed on the Paris and New York stock exchanges.
The deal is subject to the approval of the local independent AXA Asia Pacific directors as well as the Foreign Investment Review Board.
According to AXA chairman Rick Allert, his counterparts in France have already held informal discussion with the board.
“The independent directors will consider whether it is in the interests of minority shareholders and we have appointed Macquarie Bank to advise us,” Allert says.
In a letter to Allert, AXA SA chairman Henri de Castries says the slow growth of the Asia Pacific business is why the parent wants 100 per cent control.
“We consider that it is not growing as rapidly as it could in Asia due to the constrains arising from the fact that it is listed,” de Castries says.
“We believe the risks, capital and cost commitments associated with pursuing available growth opportunities in Asia are difficult to justify for a company the size of AXA Asia Pacific due to its large number of retail shareholders and increasing our ownership to 100 per cent will better position the company to seize these external growth opportunities as they arise,” he adds.
The Asian operation contributes about 14 per cent to the global fund managers’ bottom line with Australia making up 50 per cent of that figure.
AXA Asia Pacific’s half year results reported an after tax profit of $193.5 million for the six months ending June, 2004.
AXA Asia Pacific group chief executive Les Owen says the value of new business in Australia and New Zealand was up 19 per cent to $39 million while funds under management and advice grew 12 per cent to $49.6 billion during the six months.
