AMP could see a $51 million hit from the potential delay of the sale of its capital markets business to Dexus due to a regulatory hold-up.
Dexus and AMP agreed to sell Collimate Capital – the rebranded name of AMP Capital – last April, and the terms of the sale agreement allow either party the right to terminate the deal by 27 January 2023.
In an announcement to the ASX on Monday morning, both parties have agreed to extend the deadline to the end of February; however, the purchase price will be reduced from $250 million to $225 million. The remaining potential funds under management-based earnout – currently valued at $26 million – will be forfeited.
AMP said it continues to work towards achieving regulatory approval but is uncertain if it will be able to do so by the original deadline.
The regulatory approval hold-up isn’t related to Australia – AMP’s interest in China Life AMP Asset Management (CLAMP) which requires approval from a regulator in China.
Dexus and AMP have entered into a non-binding term sheet that includes a revised, two-stage transaction structure.
The first stage will see the majority of Collimate’s domestic assets and management rights, and employees to transfer Dexus, while the transfer of CLAMP to follow, after regulatory approval. The first stage is expected to be completed by March.
The 173-year-old organisation is selling the domestic real estate and infrastructure equity business to real estate investment trust Dexus. The international infrastructure business is being sold to global infrastructure investment firm DigitalBridge.
AMP previously updated the market in November that it expected it would be unlikely the transactions would be completed by the end of that month due to regulatory issues.
AMP Capital was rebranded to Collimate Capital last February, allowing AMP to focus on its advice licensee business without the conflicts of owning a product manufacturer.
Last December, AMP finalised the sale of its global equities and fixed income business to Macquarie Asset Management for $88.5 million, including future performance fees.
