Raid on AMP puts smile on face of shareholders

By PAULA OLIVER and AGENCIES

A lightning raid on AMP's share register by the National Australia Bank yesterday raised doubts over the bank's intention to bid for the National Bank of New Zealand.

NAB's surprise raid on the troubled financial services giant AMP started late on Wednesday night.

It sought a stake of almost 15 per cent, but by yesterday afternoon sat well short of its target on 5.4 per cent.

Forsyth Barr Frater Williams broker Matt Willis said it looked to be the beginning of a full takeover bid.

"It's game on. NAB are unlikely to want to build a stake of 15 per cent and leave it at that."

The move by the Melbourne-based bank, owner of the Bank of New Zealand, sent AMP's share price soaring - a welcome relief for the company's 90,000 New Zealand shareholders who have seen the value of their investment plummet over recent months.

But it also raised some questions about NAB's intentions towards the National Bank sale process.

NAB is the only one of the big four Australian banks yet to declare its hand.

It has been seen as the dark horse which could make a late run for the prized asset.

Rumours from Australia as recently as this week suggested NAB was about to make an application to New Zealand's competition watchdog, joining ANZ and Westpac in doing so.

But the surprise move on AMP has dampened that speculation.

A spokesman for NAB in Melbourne yesterday refused to comment when asked if it meant the end for a potential National Bank bid.

"We don't discuss corporate issues, so I can't make a comment," he said.

Commentators in Australia suggested that it appeared NAB had chosen to chase AMP rather than the National Bank.

But few were willing to write off an NAB bid for the New Zealand bank.

One said NAB could hold on to its new stake in AMP and still make a bid.

NAB boss Frank Cicutto yesterday said the bank had acquired 34.3 million AMP shares at A$6 a share as a "strategic investment".

Brokers said NAB had started its offer at A$5.60, and had been spurned by institutions despite raising it.

That was likely to be because a battle for control among multiple parties was expected.

AMP has become a target because of woes stemming from its troubled British arm.

The global group reported a loss of $2.45 billion in the half year to June 30, and its chief executive, Andrew Mohl, is working towards a demerger of the British businesses that would rank as one of the largest undertaken.

AMP's Australasian assets are highly regarded, and it is that part of the business that is rumoured to be in the sights of not only NAB, but possibly also ANZ, HSBC and the Commonwealth Bank.

Cicutto said yesterday that NAB was not interested in acquiring AMP while it still owned its British business.

An Australian analyst noted that if NAB wanted to take charge of the Australian arm of AMP, a bid for the National Bank was unlikely.

Mohl said the company's board was still progressing towards a demerger.

For now, it is AMP's shareholders who can crack a tiny smile.

Yesterday on the NZX their shares closed at $7.08, up $1.43.