Mortgage Industry News

← Back

AMP bid in pipeline

Date: Fri, 16 May 03 Analysis

LONDON, UK - AMP's plans to spin-off its UK businesses into a separately listed company under the Henderson banner have been thrown into doubt following news of a possible bid by venture capitalists.

According to today's Telegraph, the US buyout specialist, KKR, is heading a consortium of firms that have expressed interest in AMP's UK life insurance divisions - Pearl Assurance, NPI and London Life.

The consortium has established a new entity, Resolution Partners, to facilitate the bid, which it has been suggested may be worth as much as £1 billion.

While KKR yesterday declined to comment on rumours of the bid The Telegraph quoted a source 'with knowledge of the bid' as confirming the advanced stage of the plan.

'They [KKR] have been working very hard on this. The problem they face, however, is that to get the returns the private equity houses would require they would either need to get the insurers at a substantial discount to net assets or use debt to finance the transaction. The Financial Services Authority may not be too keen on that,' the source said.

AMP had planned to list its UK businesses as a separate company having cited them as the main cause behind its £350 million loss in 2002. The company was forced to inject £500 million into Pearl last year to ensure it did not breach statutory solvency rules.

AMP recently embarked upon an AUS$1.5 billion rights issue in an attempt to stave off its financial crisis.

© 1998-2005 DeHavilland Information Services plc. All rights reserved.

Endsleigh Insurance Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.