NAB-AXA agreement likely

AXA Asia Pacific Holdings ownership is at stake this week.
AXA Asia Pacific Holdings ownership is at stake this week.
The future of AXA Asia Pacific Holdings' (AXA AP) Australian and New Zealand businesses could be known as early as today.

National Bank Australia yesterday called a trading halt on its shares pending an "imminent" announcement on its bid to buy the Australian and New Zealand businesses of the group.

NAB has asked that the trading halt last until the start of trading today or an earlier time, if agreed by the stock exchange.

NAB shares last traded at $A27.70 ($NZ36).

Commentators said it appeared as though NAB had secured the backing of France's AXA SA for its $A13.29 billion ($NZ17.2 billion) plan to take over AXA SA.

A deal with AXA SA would be a key step for NAB towards the largest takeover in Australia's financial sector, leaving approval of the competition regulator as the biggest potential hurdle.

AXA AP, a life insurer and wealth manager whose independent directors have agreed to recommend the NAB proposal, also placed its shares on trading halt pending an announcement.

NAB, the owner of the Bank of New Zealand, had been in talks on Monday night and yesterday with AXA SA, which owns 53.9% of the takeover target, after a deadline for finalising a deal passed on Monday.

The bank wants to keep AXA AP's Australian and New Zealand operations and sell the Asia assets back to AXA SA, in line with a similar deal the French company had previously with rival bidder AMP.

NAB launched its surprise bid on December 19, two days after AMP lifted its offer for the company.

The deal hinges on AXA SA's support and it maintaining its net cash and financial contribution.

The Australian Competition and Consumer Commission recently tipped the scales in favour of AMP, after raising more concerns about NAB's bid than with the AMP offer.

NAB is already Australia's largest wealth manager.

The ACCC is set to rule on AMP's bid tomorrow and on NAB's by April 22.

The ACCC said yesterday there had been no change to its deadlines for those decisions.

A spokeswoman for AMP said the company had no comment to make on the announcement by AXA AP and NAB.

AMP's stated position in February remained the same.

In February, AMP chief executive Craig Dunn had said AMP's next move would be to make a clear case to the competition authority why its proposal was better for competition than the bid from NAB.

There is a pure cash alternative and a cash and shares alternative in the NAB proposal and the cash alternative is $A6.43 per AXA AP share.

AMP proposed a shares and cash acquisition with no pure cash alternative.

The sweetened deal valued AXA AP shares at $A6.22 a share.

NAB would also let AXA AP shareholders retain the group A9.25c second-half dividend.

Craigs Investment Partners broker Chris Timms said the cash component made the NAB offer more attractive for shareholders.

Many of the small shareholders would have inherited their shares in the earlier demutualisation process and would be keen to sell.

"From a shareholder's point of view, cash will always win over a mixture of both cash and shares."

There was still uncertainty about the fate of the NAB bid because it meant taking a competitor out of the market.

The ACCC would be concerned about the loss of competition, Mr Timms said.

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