AMP could be in the box seat to buy Westpac’s wealth management unit with sources suggesting that the Australian listed financial group put in a final offer for the company.
Final bids for the unit were due on August 22.
Sources say that Colonial First State lobbed a bid that may have been as low as $600m.
There have been suggestions that AMP did not put in a final offer by the deadline, but it now may be in talks with an offer submitted at a higher price.
Colonial First State is jointly owned by Kohlberg Kravis Roberts and CBA.
In the first round of the contest, CFS was thought to have been the only group to have put forward a conforming bid.
AMP reported results on August 11 and at the time it said that it was in for a $1bn-plus windfall after a series of asset sales, including its stake in Resolution Life Australasia and its fund manager Collimate Capital.
It said it would ramp up its capital return program rather than seek out fresh acquisitions.
But without its funds management unit and its life insurance operation, the company only consists of a bank and a wealth management arm and market observers believe it needs to acquire a business to regain some meaningful scale.
Its market value is $3.6bn.
Earlier, it was thought that AMP would not be able to compete with other parties vying for Westpac’s wealth unit.
Private equity firm names that have been discussed as being around the situation are Bain Capital, JC Flowers and Apollo Global Management, which is a major shareholder in Challenger.
The timeline for the sale process was extended, as bidders focused in on the wealth management unit’s performance up until the end of the June 30 financial year.
Earlier, it was anticipated that the unit would sell for at least $700m, but prices are understood to have again been adjusted downwards amid a period of market volatility.
Banks have been retreating from non-core operations to focus on mortgages and business banking.
Some believe that even if Westpac attracts low offers for the business, it is still better off a seller given the capital investment that is needed over time.
Advising on the sale of Westpac’s wealth management unit, which includes its Panorama platform, is investment bank Morgan Stanley.
Already, Westpac has offloaded the superannuation operations in its wealth management unit to Mercer Australia for $225m.
Earlier, Westpac had about $140.2bn of funds on its platforms, including $105bn on its Panorama platform at March.
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