Life sale makes us more attractive says AMP chair David Murray amid speculation of Macquarie play

AMP chair David Murray says the sale of the group’s life insurance arm will make it more attractive to potential suitors.

AMP chairman David Murray. Hollie Adams/The Australian

AMP chairman David Murray has said the sale of the embattled firm’s life insurance arm would make it more attractive to a potential acquirer, as he declined to comment on a possible $7 billion-plus tilt by Macquarie Group.

AMP’s shares rebounded 7 per cent to $2.64 on Thursday after The Australian’s DataRoom revealed Macquarie was running the numbers on a potential offer for the wealth group. Sources said the asset manager and investment banking group’s interest in AMP (AMP) was reignited last week around the time its shares sank to a record intraday low of $2.28.

“I just can’t comment on that,” Mr Murray told the TICKY program on Thursday, when asked about Macquarie’s possible interest in a bid.

“The board of AMP in every circumstance will look to the interests of its shareholders,” he added.

Mr Murray said AMP’s decision to sell its life insurance unit would be further vindicated by any interest from acquirers, as the divestment would make the company a more attractive proposition for whoever was running it.

“What we’ve said is absolutely true, that the complexity that this (life insurance sale) takes out of AMP is very substantial. To decouple that from the rest of the businesses makes life much simpler for us to design the future.

“To the extent that anybody might be interested in AMP, at the time when we announced the sale of this, wouldn’t it also suggest that we are doing the right thing.

AMP’s board is facing a backlash from shareholders after it agreed to sell its life insurance and mature business for a headline $3.3 billion, or 82 per cent of the embedded value, to London-based Resolution Life.

Several large global private equity firms are also said to be running numbers on AMP but the regulatory environment and the potential of further fallout from the Hayne royal commission are potential stumbling blocks.

A Macquarie spokeswoman declined to comment on the group’s potential interest in AMP.

Macquarie reports its interim earnings on Friday.

According to sources, Macquarie had in recent months dropped away from the sell-side role — alongside UBS — for AMP’s multi-tiered life insurance sale.

Incoming Macquarie chief Shemara Wikramanayake is said to have heavy involvement in assessing the investment logic as the group figured out whether to target infrastructure arm AMP Capital or make a whole-of-company bid.

If Macquarie were to proceed, which is yet to be decided, sources said the asset manager and investment bank would probably try to get a foothold on the AMP register first.

Macquarie sold its life insurance business to Zurich Australia two years ago.