Craigs Investment Partners yesterday raised its price target for AXA Asia Pacific believing AMP would counter with a higher offer now that National Australia Bank had shown its hand.
While NAB's cash offer of $A6.43 ($NZ8.1) per share for AXA AP remained dependent on the co-operation of AXA SA, the French parent's desire for the Asian assets meant, at the very least, NAB had created a new floor in AXA's share price, Craigs broker Chris Timms said.
NAB on Thursday agreed terms with the AXA AP board to buy its Australian and New Zealand assets for a total $4.6 billion.
The offer had been recommended by AXA AP's independent directors in the absence of a higher bid.
NAB's bid compared with the previous offer from AMP and AXA SA of $A6.22.
The NAB offer gave shareholders the option of receiving all cash or $A1.59 in cash and 0.1745 NAB shares.
"However, the deal is highly conditional, with NAB still requiring AXA SA's co-operation.
"We believe the most likely outcome is for AMP to return with a higher offer given the attractiveness of the assets and the threat of becoming a target themselves," Mr Timms said.
Craigs calculated that AMP could pay up to $A6.60 a share and still make the transaction earnings per share neutral in 2011.
AXA remained a sound business with strong long-term growth prospects in Asia.
The latest offer represented a 50% premium to AXA's November 6 closing price and had been recommended by the board, subject to no superior proposal being made.
Australia and New Zealand Banking Group Ltd , the smallest of Australia's four big lenders, declined on Friday to comment on rumours that it might be interested in acquiring wealth manager AMP, Reuters reported.
Chief executive Michael Smith, speaking to media after the bank's annual meeting in Melbourne, said the bank remained focused on bedding down its recent buy-out of a wealth management joint venture with Dutch financial group ING.
Mr Smith said ANZ's core business was banking and that it remained interested in developing its wealth management business.
