AMP still in Macquarie’s sights

Plenty of private equity firms have been looking at AMP but are hesitant. Picture: iStock

Deal-making may be subdued in some parts of the market, but a number of players are still believed to be running the ruler over companies in the financial services space.

It is understood that Macquarie Group — long considered one of the most likely candidates to buy AMP — is still assessing the company.

While matters cannot get much worse for AMP with its market value languishing around $5bn, one deterrent is that they would not be offered any indemnity for prior conduct from financial planners.

Plenty of private equity firms have been looking at AMP but are hesitant for that reason.

Macquarie is likely to be attracted to AMP’s bank and asset manager AMP Capital and will surely be giving consideration as to how a deal could work — if not for itself, perhaps for one of its clients.

AMP has made further headlines in recent days following the decision to release details of an investigation into the sexual harassment claims against AMP Capital head Boe Pahari.

The company came under fire for promoting Mr Pahari despite being financially penalised over a harassment incident several years earlier, for which further details have recently come to light.

It is also reeling from the departure of senior executive Alex Wade, which is understood to be linked to inappropriate conduct and lewd photos.

AMP’s current market value suggests investors are treating its wealth business as worthless, say analysts, which could make the company attractive for buyout funds.

Earlier this year, AMP’s banker UBS was said to be considering selling a stake in AMP Capital and many believe that is still possible.

Meanwhile, some are still interested in NAB’s MLC wealth management business, but not for $3bn.

JC Flowers, advised by JPMorgan, is still in the contest, but some think it isn’t serious.

New York-based CC Capital is understood to have been keen to buy MLC after last year looking at the now collapsed financial technology firm Spitfire.

Its plan has been to buy wealth assets for the lowest price possible and then consolidate.

This would impact the strategy of Kohlberg Kravis Roberts, which has now left the Morgan Stanley and Macquarie Capital-run MLC contest.

KKR wanted to buy MLC and migrate the business onto the Colonial First State platform, of which it secured 55 per cent for $1.7bn from CBA in May.

But it is understood that KKR staged a retreat from the MLC competition because the Australian Prudential Regulatory Authority would not approve its acquisition of the CFS business if it was also a contender for MLC.