Ask the market

10 November 2009 By John Foley Follow @johnsfoley

The independent directors of Axa Asia Pacific rejected the offer of a 31% premium to buy out minority holders. The market agreed, and it looks like the right call. Direct control of Asian assets promises good growth for Axa. And it is probably willing to pay up to get it.

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The board of Axa Asia Pacific (AAP) rejected an A$11bn ($10bn) offer from its French parent company to buy up the listed minorities in the Australian insurance group and carve the business up along with AMP, a domestic rival. In a November 8statement, the board said the offer failed to value Axa's Asian operations fully.

The offer would involve Axa selling its 54% share of AAP to AMP for A$5.34 per share in cash, or A$6bn in total. AMP would then make an offer of cash and shares to minority shareholders worth A$5.34, based on DATE closing share price. Finally, AMP would sell the Asian assets of AAP back to the French parent for an equity value of A$7.7bn.

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