AMP Life sale in doubt
Stock
AMP (AMP) $1.89 as at 11/07/2019
Event
Embattled financial services company AMP is in hot water again today, the stock has traded to new all-time lows early in the session following news that the RBNZ expects to block the sale of their Life business, a $3.3b deal with Resolution that was announced in October last year. Shares are trading down over 10% in the session, which seems to a be a win at the moment given the issues that this failed sale could create.
In an early morning announcement, AMP noted that feedback from the NZ central bank put the deal in jeopardy with regulators wanting to force extra requirements from Resolution which would significantly alter the metrics of the deal.
AMP and Resolution will now head back to the drawing board before either confirming the deal is dead in the water or putting forward a new proposal. The most significant impost to the deal is the RBNZ requesting Resolution alters its branch structure such that some New Zealand assets are ring-fenced for local policy holders.
Along with the news, AMP noted it still expects surplus capital despite the result but it would not pay an interim dividend.
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