AMP Limited has confirmed the sale of its real estate and domestic infrastructure equity business to Dexus Funds Management in deal valued at about $250 million, but the wealth manager will continue looking for a buyer for its other businesses.
After weeks of speculation, AMP announced on Wednesday it had reached an agreement to sell part of AMP Capital spin-off Collimate Capital to leading real estate investor Dexus, but the remainder will be sold in a second transaction in due course.
AMP has reached a deal with Dexus. Credit:Will Willitts
The deal includes an upfront cash consideration of $250 million but the total value could slide up to $450 million after further negotiations with fund investors, AMP said.
The transaction includes the sale of $31 billion in assets under management, including domestic real estate of $21 billion and infrastructure equity of $10 billion, as well as the management platform and key investment professionals.
AMP said discussions would continue with potential suitors for Collimate’s international infrastructure equity business, “after receiving a number of approaches from parties interested in acquiring the business”.
Property development giant Mirvac has also reportedly thrown its hat in the ring as an interested party.
“AMP will continue these discussions with a focus on maximising the value for shareholders by achieving the best outcome for clients and other stakeholders,” the company said.
Following the deal, AMP will no longer pursue a demerger of Collimate Capital, it said.
AMP chair Debra Hazelton said the sale was a “strong outcome for AMP shareholders and Collimate Capital stakeholders”.
“As we work towards completing the transaction, a key priority for our board will be returning capital to AMP shareholders in acknowledgement of their patience as we have pursued options to maximise value for them.
“We continue our discussions on the remaining international infrastructure equity business in order to achieve the best outcomes for AMP shareholders, clients and our teams.”
AMP chief executive Alexis George said the deal would create real value for shareholders. “In Dexus we have found a strong owner for the real estate and domestic infrastructure equity businesses, which will add significant value through their strong track record and experience in real estate and asset management. Their depth of talent will strongly complement our specialist teams.
“Discussions with interested parties on the sale of our international infrastructure equity business continue. Any decisions will be driven by our focus on delivering value for shareholders, leveraging the expertise of our investment teams and working closely with our clients to align an outcome that best supports them.”
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