AMP Shares Rise Amid Speculation of NAB's Revamp of Bid

Shares in AMP Ltd surged early in trading, reaching their highest intraday level since January 18, as speculation mounted that National Australia Bank Ltd might revamp its bid for the financial services giant. AMP's chairman revealed last week that NAB proposed a bid, but the details were vague, with no definitive price offered. The bid's success hinges on NAB's ability to make a sizeable acquisition, and analysts see AMP as an attractive target due to its dominance in funds management and large customer base.

Key Takeaways:

• AMP shares rose to $16.72, their highest intraday level since January 18, before closing 37.8 cents higher at $16.358.
• NAB undulated before settling 22 cents lower at $20.16.
• AMP chairman Ian Burgess revealed that NAB proposed a bid, but the price was not definitive.
• A Sydney-based insurance analyst believes AMP is an attractive target for NAB due to its dominance in funds management and large customer base.
• AMP is not considered one of the "Pillars" of the Australian financial services industry, making it a prime target for takeover.
• The federal government's "Four Pillars policy" prioritizes the four major banks and may influence NAB's bid.
• Commonwealth Bank of Australia Ltd's scrip-for-scrip offer for Colonial Ltd has buoyed market interest in financial sector rationalization.

Statistics:

• AMP shares rose by 37.8 cents to close at $16.358.
• NAB shares dropped by 22 cents to settle at $20.16.
• Commonwealth Bank of Australia Ltd's scrip-for-scrip offer for Colonial Ltd was announced on Friday.
• The Australian financial services sector has seen a 13-year history of merger restrictions, starting with Treasurer Paul Keating's 1990 Five Pillars policy.

Sources:

• The Australian Financial Review