Old Mutual eyes UK arm of life assurance giant
--------------------------------------------------------------------------------
AMP is one of the top 30 life assurers
Financial Services Correspondent
OLD MUTUAL has emerged as a potential buyer of the British business of listed Australian life assurance group AMP, in a deal that would be worth about R18bn.
SA's largest life assurer, listed in the UK and on the JSE Securities Exchange SA, said earlier this year that it was looking to buy a life assurance or asset management company in the UK to bolster its operations in that country.
This initially sparked rumours it was eyeing ailing life assurer Britannic for about £353m, but now the UK business of Australiabased AMP is seen as the target.
AMP specialises in asset management, life assurance and insurance and is one of the top 30 public life assurers worldwide, with core operations in Australia, New Zealand and the UK.
In May this year, AMP said it wanted to "demerge" its core Australian business from its UK interests, allowing the units to focus on meeting the different needs of separate geographical markets.
AMP's UK business includes Henderson Global Investments, Pearl, London Life and NPI. Should Old Mutual decide to bid, the price tag is likely to be at least equal to AMP's UK embedded value as it stood in May, which was about £1,5bn.
AMP spokesman Matthew Coleman said that "expressions of interest have been received in respect of various components of the business, including the UK business".
Coleman would yesterday not confirm whether Old Mutual had expressed interest in the firm, but reliable sources said that the SA company was indeed one of the interested parties.
"But these expressions of interest remain informal and general at the moment and any substantial proposal placed on the table will be brought to shareholders," he said.
Merrill Lynch analyst Stuart Rider said: "Old Mutual has made no secret that it is looking for a UK acquisition and one would expect any UK business offered for sale would be rumoured to be linked to them."
Rider said Old Mutual could potentially pay between £650m and £800m for a UK acquisition before having to go to the capital markets to raise funds .
Jul 22 2003 06:54:03:000AM Rob Rose Business Day 1st Edition
Tuesday
22 July 2003
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
