IOOF in race for AM Corp

IOOFhas confirmed that it is a leading contender to purchase superannuation and investment specialistAM Corporation.

The managing director of IOOF, Rob Turner, says IOOF is “genuinely interested” in AM and was awaiting a decision on the future ownership of the group by AM’s owner and major shareholder of AM, David Smith.

“I’m hoping that he is going to give some indication [of the new owner] soon,” Turner says.

AsMoney Managementwent to press last week, representatives of AM would not be drawn on the matter, stating that negotiations are still under way with several leading contenders to buy out the group. A spokesperson for AM says the group is hopeful the matter will be resolved quickly.

Speculation that IOOF is set to be successful in the bid has been fuelled by a series of cost cutting measures at the group.

Three of IOOF’s top business development managers were made redundant last month, and given letters stating that the reason for the redundancies included improving cost efficiencies.

In response, Turner says that while a number of staff have been made redundant, including 40 from IT departments over the last 18 months, the cost cutting exercise has no direct link to the possible purchase of AM.

“The industry is going through a difficult time, everybody’s looking at cost and where we can make savings. In this depressed market, the business can only support so many people,” Turner says.

AM announced last November it would look for a buyer after a strategic review of the group by Gresham Partners identified it would benefit from a much-needed capital injection.

AM Corp has previously stated that independent financial planners will share in the proceeds of the sale.