AMP Share Price up on Takeover — the Big Picture

At time of writing, the share price of AMP Ltd [ASX:AMP] is up over 20%, trading at $1.56, after a takeover offer came from US investment giant Ares Management.

After a reasonably strong bounce off the March market lows, the AMP share price was locked in yet another slide before today’s bid:

amp asx

Source: TradingView

AMP share price up on confirmation of bid

The key words from the announcement are as follows:

AMP notes discussions on the proposal are at a very preliminary stage and there is no certainty that a transaction will eventuate.

And from The Australian Financial Review:

It is understood the offer would be a balance sheet transaction for Ares rather than an investment by its funds, meaning the corporate entity is interested in owning AMP’s assets.

The statement also revealed AMP has received “significant interest” from parties with an appetite to acquire some or all of its assets.

AMP chairman Debra Hazelton in September put the company on the table with a portfolio review which could recommend a change in AMP’s mix of assets, with a potential break-up of the company a possibility.

Here’s the big picture

AMP’s problems prior to today’s announcement were well-documented.

It will be intriguing to see what the terms of the potential deal are.

I remember it was quite the talking point when the Afterpay Ltd [ASX:APT] market cap overtook the AMP market cap.

Today, the world of banking and wealth management is undergoing a drastic revision.

We call it ‘the Great Bank Unbundling’ in our paid service, Exponential Stock Investor.

It’s a thesis about how the traditional major players in banking and finance will shatter into an archipelago of smaller players in the years to come.

And it seems to be playing out right on cue.

Smaller, nimbler fintechs and neo-banks will become the new stars, while the stale bank stocks stumble to innovate and boost efficiency.

It’s no different for AMP, which looks to be in the process of fading away.

It’s 171-year-old history may end soon, but the main thing to be cognisant of is the next generation of fintechs on the horizon.

You can get an excellent report on three small-cap fintechs, right here.

It’s a great read, and the companies profiled could have exciting growth potential due to the rapid changes taking place in the financial world.

Regards, 

Lachlann Tierney,

For Money Morning


Lachlann Tierney is an Analyst for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently he has been working with Ryan Dinse. Lachlann is involved in two publications:


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