AMP takeover proposal withdrawn; no final dividend for investors

In a media briefing, chief executive Francesco De Ferrari said he could not provide more details on why the takeover offer had fallen apart.

“As to why Ares withdrew their conditional proposal, I really can’t talk for them,” he said. “The whole portfolio review exercise was set up to test if there were better ownership options for each one of our businesses.”

While acknowledging that the portfolio review was creating uncertainty for shareholders, the CEO wouldn’t say how many suitors AMP was in discussions with or reveal the timeline it was working to.

AMP reported its statutory profit in 2020 was $177 million, which reversed the $2.5 billion loss from the previous year after its bruised reputation from the banking royal commission saw clients abandon the company en masse.

Despite the stronger headline figure, AMP’s assets under management fell by 8 per cent in its wealth management business and 7 per cent in AMP Capital, “reflecting volatile investment markets and net cash outflows”.

Shareholders will not receive a final dividend after a special yield of 10 cents per share was paid in the December half, but AMP added the board was committed to restarting dividends this year, “subject to the completion of the portfolio review, market conditions and business performance”.

AMP’s board has removed its wealth management and bank businesses, AMP Australia and AMP Bank, from the sale process and will now return to focusing on Mr De Ferrari’s three-year transformation strategy.

“AMP continues to review options for maximising the ability to grow and invest in AMP Capital including exploring partnership options,” the company said. “The board will provide an update on the outcome of ongoing discussions as soon as possible.”

The latest fund outflows were partly caused by $1.8 billion being withdrawn under the federal government’s emergency scheme that allowed Australians affected by the pandemic to access their retirement savings early.

The volatility caused by COVID-19 also contributed to profits falling across most arms of AMP’s business, including AMP wealth management (44 per cent), AMP Bank (16 per cent) and AMP Capital (32 per cent).

Mr De Ferrari said 2020 had been a tough year around the world, with COVID-19 unsettling clients, workplaces and the broader community.

“Within our business, it was also an extraordinary year, with significant internal change and the initiation of a portfolio review,” he said. “Amid all these events, I couldn’t be more proud of our teams who, working remotely, maintained a relentless focus on the execution of our strategic agenda.”

Mr De Ferrari vowed to make fixing AMP’s culture his number one priority after chair David Murray and board member John Fraser left the company following an investor revolt over a poorly handled sexual harassment complaint.