(Reuters) - Australia’s AMP Ltd (AMP.AX) has scrapped plans to divest its New Zealand wealth management arm after offers for the unit fell short of its expectations, citing disruption caused by the coronavirus pandemic on the economy and financial markets.
The country’s biggest wealth manager said on Friday it held talks with a number of parties on selling the business, once valued at between NZ$300 million ($182.58 million) and NZ$500 million. But it said with offers failing to match its target, it would instead focus on expanding the unit in existing markets.
Investors shrugged off the change of plan, with AMP shares climbing 4.4% by 0413 GMT, outperforming a 0.7% gain in the broader market .
But it comes as a series of Australian mergers and acquisition deals face lower prices, with advisers and bidders having difficulty achieving their desired price tags for assets during the coronavirus crisis.
In March, sources had told Reuters that bidders for Australia and New Zealand Banking Group’s (ANZ.AX) car lender UDC Finance were lowering their offers. A private equity battle for control of media and entertainment firm Village Roadshow (VRL.AX) was also expected to see lower pricing.
AMP said it would furnish more details of its business plans along with its half-year results in August. It reported a A$19.4 billion decline in first-quarter assets under management across the unit in April, amid a plunge in equity and commodity valuations triggered by the coronavirus outbreak.
In a separate statement on Friday, AMP said more than two-thirds of shareholders who voted at its annual general meeting opposed a management resolution on executive pay, with 67.25% of votes cast against its remuneration report.
The result comes after Chief Executive Francesco De Ferrari’s short-term incentive plan was increased to 200% of his base salary in February, even as the company posted its biggest annual loss in 17 years. [nL4N2AC4EK
The shareholder disapproval is a setback for AMP as it seeks to restore its reputation after a public inquiry revealed widespread impropriety in its operations, including attempts to mislead regulators.
More than 25% of shareholder votes cast against a pay resolution effectively constitutes a ‘first strike’ under Australian financial laws. If the resolution is voted down for a second consecutive year, the entire board can be dissolved.
Reporting by Rashmi Ashok and Shashwat Awasthi in Bengaluru; Editing by Grant McCool and Kenneth Maxwell