AXA Asia Pacific Prefers NAB A$13.3 Billion Bid

Darlington Musarurwa
17 Dec, 2009
New York City

National Australia Bank higher bid with cash was accepted by independent directors at AXA Asia Pacific Holdings for A$13.3 billion. The deal trumps the joint bid from AXA SA and AMP. Rio Tinto to sell iron ore to India.

[R]3:00AM New York, 7:00PM Sydney - National Australia Bank higher bid with cash was accepted by independent directors at AXA Asia Pacific Holdings for A$13.3 billion. The deal trumps the joint bid from AXA SA and AMP. Rio Tinto to sell iron ore to India.[/R]

Australian stocks rose fractionally as commodities and metals gained in the international markets. The Australian dollar edged higher against the dollar and the yen.

National Australia Bank Ltd offered A$13.3 billion for AXA Asia Pacific Holdings Ltd.

Commodity stocks advanced as gold prices edged up 1.2% to $1,136 per ounce and crude oil prices gained 3.3% to $73.1 per barrel.

In Sydney trading ASX 200 Index increased 0.2% or 8.4 to 4,670.30.

Of the ASX 200 index stocks, 131 gained, 58 dropped, and 11 were unchanged. AXA Asia Pacific led gainers in the index shares with a rise of 12.7% after NAB made a $13.3 billion bid for the company.

NAB Acquires AXA for A$13.3 billion

AXA Asia Pacific Holdings reported today that it has agreed on the A$13.3 billion bid by the National Australia Bank “in the absence of a superior proposal.” The higher bid also had a cash component that convinced independent directors to recommend the bid to shareholders.

AMP and AXA SA joint offer was rejected. The lender offered A$6.43 a share of AXA Asia Pacific or 0.1745 NAB shares and A$1.59 cash. The NAB offer of A$6.42 represents a 50% premium to the company’s closing share prices on November 6, 2009.

In addition, the shareholders will receive 9.25 cents dividend for their shares for the second half 2009 results.

Under the new proposal, National Australia Bank will acquire 100% of AXA Asia Pacific and merge the Australian and New Zealand businesses with its own operations and divest the Asian business to AXA Asia.

NAB assets under management will increase to A$144 billion if the deal is completed and AXA will acquire the Asian operations. NAB in June acquired the domestic unit of Aviva Plc.

AXA Asia Pacific chairman Rick Allert said, “The Independent Board Committee believes the NAB Proposal offers minority shareholders fair value for their investment in AXA APH and provides them with an alternative combination of the certainty of the NAB cash alternative and the upside of the NAB share and cash alternative.”

Rio Tinto to Sell Iron Ore to India

The Australian reported today Rio Tinto Iron Ore chief executive officer Sam Walsh said the company has agreed to sell its first iron ore to India.

According to the report, the sale of 160,000 tons of Rio''s Pilbara Blend Fines will be loaded on the Genco Claudius ship at Dampier in late-December, for shipment to the Hazira port, western India, for unloading. The cargo is priced at the international spot rate.

ASX Movers

Gunns Limited led the decliners in the S&P ASX 200 index with a loss of 4.9% followed by losses in National Australia Bank Limited of 4.6%, in Billabong International Limited of 3.9%, in Elders Limited 3.2% and in Lend Lease Corporation Limited 2.9%.

AXA Asia Pacific Holdings Limited led gainers in the S&P ASX 200 index with a rise of 12.7% followed by gains in Carnarvon Petroleum Limited 6.1%, in ING Industrial Fund of 5.5% and in Australian Infrastructure Fund of 5.4%.

Other Movers

Asciano Group the manager of ports and rail assets fell 1.7% to A$1.68 and BHP Billiton plc the mining company added 0.8% to A$41.41.

Lorraine Copper Corp the developer closed unchanged at A$0.07.

Morgan Stanley India Investment Fund, Inc advanced 0.6% to A$22.59 after the real estate investment trust was upgraded to “overweight” from “neutral” at JPMorgan Chase & Co.

National Australia Bank Limited fell 4.6% to A$26.65 after the lender’s bid for AXA Asia Pacific Holdings Limited was accepted by the independent directors at the company.

Qantas Airways Limited climbed 1.8% to A$2.73 and the airline faces strike for five business days beginning Thursday. The spokeswoman for labor union the Association of Professional Engineers, Scientists and Managers Australia said that airline is not addressing their issues revolving around fatigue and long work hours.

Rio Tinto Limited advanced 1.2% to A$71.65 and the metal and mineral giant is expected to lose two of its most senior non-executive directors next year, the Times reported on Thursday.