AMP shares soar on National Australia Bank bid rumour

By SIMON LOUISSON

UPDATE - AMP shares soar as National Australia Bank declares interest

Shares in Australasia's largest life insurer, AMP Ltd, soared today after Australia's largest bank, National Australia Bank (NAB), launched a midnight raid for a "strategic stake".

Although bidding for over A$1 billion ($1.13 billion) worth of shares -- some 174 million at prices of up to A$6 per share -- the bank said in a statement it had only secured 34 million shares worth A$206 million -- taking its stake to 5.4 per cent.

AMP's stock rose more than 25 per cent to $7.10 on the local market today. Turnover was heavy with more than 2.5 million shares worth over $17 million changing hands on the local market.

In a disastrous period of business thanks to the British investment, AMP shares have crashed from $16.77 a year ago and from $26.60 two years ago.

"This is a strategic investment for the National," NAB's chief executive Frank Cicutto said in a statement.

"We await the detailed information to be provided in AMP's demerger documents.

"The National has no interest in acquiring AMP while AMP owns its UK business."

Brokers and analysts said they doubted NAB would be content with a strategic stake and believe the raid would lead eventually to a full takeover.

"It's game on," said Forsyth Barr Frater Williams broker Matt Willis.

- NZPA