AXA eyes $2.2bn Asia takeover
SYDNEY, Australia (CNN) -- French life insurer AXA has outlined a $2.2 billion conditional bid to move to full ownership of Australian-listed subsidiary AXA Asia Pacific.
AXA, which now holds 51.66 percent of AXA Asia Pacific, wants to boost its exposure to Asia, particularly the emerging market for insurance products in China.
AXA Asia Pacific has had a presence in Hong Kong for many years.
AXA said Friday the Australian-listed regional business was not meeting its full growth potential in Asia, and that moving to 100 percent ownership would enable AXA to seize growth opportunities as they arose.
It said it was prepared to offer A$3.75 a share -- a 14.3 percent premium to Thursday's closing price of A$3.28 -- for the 48.3 percent now not owned by it.
It said the offer would be half cash and half in AXA shares and was valued at €1.8 billion ($2.17 billion).
The offer values the whole of AXA Asia Pacific at about A$6.5 billion and is priced at 11.9 times 2003 earnings before one-off items.
AXA said its proposal was still at a preliminary stage and a deal "may not eventuate". It will not go ahead without a positive recommendation from AXA Asia Pacific's independent directors. It is also subject to regulatory approval.
In a statement to the Australian Stock Exchange Friday, AXA Asia Pacific chairman Rick Allert said the independent directors would now consider whether the proposal was in the interest of minority shareholders.
"In the meantime shareholders need take no action," he said.
"It sounds like it's a pretty good offer," Andrew Waddington, an analyst at fund manager BT Financial Group, told Reuters news agency.
AXA Group CEO Henri de Castries said in a statement the transaction would allow AXA to further increase its exposure to the Asia-Pacific region, to further enhance its earnings diversification and to be in a better position to seize external growth opportunities if they arise.
The AXA proposal came as AXA Asia Pacific posted first-half net profit of A$194 million, down from A$655 million in the same half last year when it benefited from the sale of its health insurance business. Sales fell 22.4 percent to A$1.928 billion.
AXA Asia Pacific shares, which were in a trading halt Friday morning, resumed at 11 a.m. local time at A$3.90 -- a gain of almost 19 percent on Thursday's close.
