Ares Management, a US-based bidder, dropped its acquisition bid, putting AMP’s plan to be bought out for $6.36 billion in jeopardy.
There were a lot of problems with Ares’ decision to leave the troubled wealth management business. The company had a significant drop in half-year profits and said it would not pay shareholders a dividend.
By 1:00 p.m. AEDT, its stock had plummeted to $1.39.
Following the retirement of her predecessor, David Murray over the board’s handling of sexual harassment accusations, AMP’s new chairman Debra Hazelton started a strategic assessment of the firm in October.
Former Treasury Secretary John Fraser resigned from his AMP directorship amid the turmoil, while Boe Pahari was demoted from his coveted position as CEO of AMP Capital.
Ares informed AMP yesterday night that it does not intend to proceed with its indicative non-binding proposal for 100% ownership of AMP at $1.85 per share, following extensive negotiations.
However, as part of the portfolio review, AMP stated it continued to engage constructively with Ares concerning AMP Capital.
That suggests Ares isn’t interested in buying the company as a whole, but AMP Capital, the company’s most profitable division, might be.
A report from AMP said that its underlying annual profit fell to $295 million.
COVID-19 impacted AMP’s clients, business, economy, and financial markets, according to a statement.
It prefers to look at underlying profit, which excludes things like business sales and compensation costs.
With a full-year profit of $177 million, it has recovered from a shallow point. The company lost $2.5 billion in the previous year.
It lost money last year due to legacy issues caused by the 2018 royal commission on banks.
AMP did many things wrong, including charging dead people for life insurance and lying to the corporate regulator ASIC.
Almost half of AMP’s board of directors resigned because of the bad news. This included CEO Craig Meller and chairman Catherine Brenner and in-house legal counsel Brian Salter.
Users Withdraw Funds
Clients are also leaving AMP because of the scandals found at the royal commission. AMP’s earnings also went down because more of its clients took their money out.
The value of assets managed by its Australian wealth management business fell by 8% in 2019-20. The company’s AMP Capital also saw a drop in the support it was in charge of.
The outflow of cash was caused by volatile investment markets and cash outflows, such as $1.8 billion from the Australian government.
The last time AMP paid a dividend was two years ago.
That didn’t happen last October, though. AMP returned $344 million to investors in the form of a fully franked special dividend of 10 cents.
AMP will sell its life insurance business for $3 billion to London-based Resolute Life in mid-2020.
“The views and opinions on this Crypto News Website are solely those of the authors and contributors. These views and opinions do not necessarily represent those of iBaseTrading or its partners.”