NAB takes time out to consider its Axa options

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MELBOURNE - National Australia Bank says it will respect the regulator's rejection of a proposed A$13.3 billion ($12.3 billion) takeover of Axa Asia Pacific Holdings as the bank plans an official response within days.

The options open to National Australia Bank are to challenge the verdict, offer more concessions to ease competition concerns or drop the purchase completely, Steve

Tucker, group executive of NAB Wealth, told the ABC's Inside Business programme yesterday.

"I guess we'll abide by the umpire's decision," Tucker said. "We'll let the market know in the next few days as to which option we're going to take."

Ten months after agreeing to the takeover, many analysts expect National Australia Bank, the country's fourth-largest, to abandon the plan. That would leave the Melbourne-based lender to focus on its wealth-management businesses and open the way for rival AMP to make a fresh bid for Axa Asia Pacific.

"We expect that NAB, after consideration, will likely let the deal rest now rather than challenge via the courts," Craig Williams, an analyst at Citigroup in Sydney, said in a September 10 report. "There is ample opportunity available in integrating its existing wealth businesses and better executing its banking strategies."

The Australian Competition & Consumer Commission blocked the deal because it was concerned National Australia Bank would have too much control of the domestic wealth-management market.

National Australia's Bank's cash offer in December won over Axa Asia Pacific's independent directors, who rejected AMP's cash and stock bid of A$12.9 billion. The competition watchdog then blocked the bank's approach twice, even as it pledged to sell one of the target's assets to ease concerns.

Asked why he didn't offer more to win over the regulator, Tucker said the bank had sought not to erode the benefits of the transaction by giving too much away.

- BLOOMBERG