AMP - Stock Update
Dexus (DXS) and AMP have released statements over the weekend confirming they’re in discussion on the sale of AMP’s asset, Collimate Capital. AMP mentioned within the statement that it’s in talks with multiple parties for the potential asset sale and that the demerger remains in the pipeline.
A dual-track process (sale or demerger) is perceived to be a good position for AMP as they are not forced to sell their asset at a discount. Further, AMP appears to not have the pressure of needing to sell the asset so the company will be able to wait for pricing they’re confident with.
The asset sale and demerger processes are subject to further risks such as pricing concerns and deal execution. Also, a degree of uncertainty remains around the asset sale, and it is therefore important to follow further releases from AMP to see how the deal progresses. Despite these risks our investment thesis remains a BUY for AMP as the demerger offers strong positioning for the company and an indication that AMP is moving in a beneficial direction.
Company overview
AMP is a financial services company that operates a variety of products such as superannuation, investment products and banking.
AMP is moving forward toward becoming a more focused organisation as a result of the upcoming demerger which supports the investment thesis of a BUY rating. Risk still remains around the demerger process although notably it is a display of the group attempting to reinvigorate itself.
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