Australia’s AMP buyout offer from Ares Management valued at $4.5 billion

Signage for AMP Ltd. adorns the top of company’s Bourke Place building in the central business district of Melbourne, Australia, on Thursday, May 10, 2018. AMP expects further payouts to customers amid an inquiry review. Photographer: Carla Gottgens/Bloomberg

(Reuters) – Embattled Australian wealth manager AMP Ltd AMP.AX on Monday said a buyout offer from U.S.-based Ares Management Corp ARES.N had an implied value of A$1.85 per share, valuing the proposal at A$6.36 billion ($4.47 billion).

The offer price represents a premium of 21% to AMP’s closing price of A$1.53 on Friday, when shares had already surged after AMP announced the receipt of the offer earlier in the day.

In a brief update, the Sydney-based company said talks were at a preliminary stage between itself and Ares, and there was no certainty with regards to the price.

Ares’ offer comes at a time when AMP’s shares have lost more than two-thirds of their value since a public inquiry in 2018 exposed systemic wrongdoing at the company including charging fees for advice that was never given, taking insurance premiums from the accounts of dead clients, and misleading a regulator.

Earlier this year, AMP ceded its position as Australia’s largest wealth manager to IOOF Holdings Ltd IFL.AX after its rival bought National Australia Bank Ltd’s NAB.AX financial advisory arm.