AMP announces operations under review, with Goldman Sachs, Credit Suisse on deck

AMP shares surge on news of a review in response to what it says is an increased level of inquiries from potential suitors.

AMP could be positioning for asset sales. Picture: Hollie Adams

Embattled wealth manager AMP will kick off a review of the group’s assets and businesses to “assess all options” for its strategy, including potential sales.

It says the move comes after an increase in interest and inquiries about its assets and businesses, but the review may not end up with any deals.

“The board has ...decided to undertake a portfolio review to assess all opportunities in a considered and holistic manner, evaluating the relative merits as well as potential separation costs and dis-synergies, with a focus on maximising shareholder value,” AMP said in a statement.

“The review may conclude that AMP’s current mix of assets and businesses delivers the best value for shareholders and may not result in a recommendation to pursue any specific transaction.”

The Australian last week revealed AMP had tapped Goldman Sachs alongside Credit Suisse as its investment banking adviser, to field a flurry of inbound interest. UBS looks to have dropped off as a mandated adviser in AMP’s latest strategic review.

AMP’s shares surged 5.2 per cent to $1.62 in early trading on Wednesday, as investors cheered the possibility of deal activity after a turbulent period for the wealth group.

AMP last month came under fire over its culture and the handling of harassment allegations, losing its chairman David Murray and fellow board member John Fraser. The head of AMP Capital Boe Pahari - the subject of a 2017 sexual harassment complaint - was elevated to the role in July then demoted last week to his former role in infrastructure ­equity.

AMP’s Australia boss Alex Wade abruptly left the company a month ago, in a departure linked to poor conduct and the sending of lewd photos to a female employee.

New AMP chair Debra Hazelton said: “The board believes that AMP has high-quality businesses with significant strategic value. The board and management firmly believe in our existing strategy, including a repivot to private markets in AMP Capital and are confident that this will deliver long-term value for shareholders.

“However, we have taken a decisive step to undertake a portfolio review to ensure we appropriately assess all options to maximise shareholder value in a considered and disciplined manner.”

AMP said it remained committed to its transformation strategy and was confident this would deliver long-term value for shareholders. AMP recently completed the sale of its life insurance business.

Macquarie Group and a host of private equity groups including KKR & Co have been linked to potential bids for AMP in the past two years. The $3bn sale of AMP’s life insurance operations has also made it more attractive to some potential buyers, given it has provided a balance sheet boost and some suitors didn’t see value in the capital-intensive insurance division.

Wednesday’s AMP statement confirmed that Credit Suisse, Goldman Sachs were the group’s strategic advisers, while law firm King & Wood Mallesons is also on deck to assist.

Last month, The Australian reported that former AMP Capital boss Adam Tindall had put a demerger proposal for the unit to the board earlier this year as he sought to separate it from the parent group. AMP Capital is the group’s infrastructure, real estate, equities and funds management division.

The AMP strategic review comes after rival IOOF emerged as the nation’s biggest wealth manager under a deal to acquire NAB’s wealth division MLC for $1.44bn. The transaction - pending regulatory approvals - will deliver see IOOF funds under management of more than $500bn.