AMP (ASX:AMP) share price slides on Ares update

The AMP share price is edging lower in morning trade. We take a look at what AMP’s 2 ASX announcements mean for shareholders.

| More on:
Falling ASX share price represented by woman looking shocked at mobile phone

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

AMP Ltd (ASX: AMP) shares are edging lower in morning trade following two market updates from the financial services giant. At the time of writing, the AMP share price has slumped 0.37% to $1.34. 

Let’s take a look at what the S&P/ASX 200 Index (ASX: XJO) company announced. 

Joint venture update

On Friday 26 March, AMP drew ASX 200 investor attention when it reported a potential joint venture (JV) with Ares Management Corp (NYSE: ARES).

Under the proposed deal, Ares would have had a 60% stake and management control of the JV. AMP, in turn, would have received $1.55 billion cash (before associated costs) for its private markets businesses, which cover its unlisted property and infrastructure funds.

The AMP share price is on the slide today after the company reported this morning that the 30-day exclusivity period with Ares for the proposed transaction has concluded.

The company said Ares has expressed an interest in acquiring 100% of the private markets businesses. It added that while it is still working with Ares towards a potential transaction, there is “no certainty that a transaction will proceed”… including the particular terms and size of a potential deal. Shareholder approval of any deal would also still be required.

What else did AMP announce?

In a separate ASX release this morning, AMP reported it is ending its management agreement with Precinct Properties New Zealand Ltd (NZE: PCT), enabling Precinct Properties to internalise the management of its business.

The New Zealand listed real estate investment trust (REIT) will pay NZ$215 million (AU$197 million) for 100% of the management interests. AMP Capital has a 50% interest in management company AMP Haumi Management Limited and has managed Precinct since the REIT first listed in 1997.

AMP reported it expects to receive roughly AU$80 million in profit from the deal “subject to foreign currency and other adjustments” for its 50% share. The company said Precinct will no longer pay management fees after the deal is complete, stating that impact was “not material to AMP Capital’s ongoing earnings”.

AMP share price snapshot

Over the past 12 months, the AMP share price is flat. That compares to a 32% gain on the ASX 200.

Year to date AMP shares are down by around 14%. AMP pays an annual dividend yield of 3.1%, 90% franked.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A group of happy office workers throw papers in the air and cheer after seeing the Latrobe Magnesium price skyrocket 38%
Share Market News

Here are the top 10 ASX 200 shares today

These ASX 200 shares outperformed all others on Thursday.

Read more »

Three male athletes sprint on an athletics track with the sun low on the horizon behind them representing the race between ASX lithium shares to outperform
Share Market News

Here are the 3 most heavily traded ASX 200 shares on Thursday

Our most traded ASX 200 share today is down by more than 5%.

Read more »

Bear market
Share Market News

Here’s why one big bad bear is suggesting the stock market could crash by 50%

One strategist thinks markets haven't bottomed.

Read more »

Investor sitting in front of multiple screens watching share prices
Share Market News

5 things to watch on the ASX 200 on Thursday

Here's what to expect on the ASX 200 on Thursday...

Read more »

A trendy woman wearing sunglasses is making it rain, spraying cash on that bargain.
Share Market News

Here are the top 10 ASX 200 shares today

It was a great day on the market for these ASX 200 shares.

Read more »

An office worker and his desk covered in yellow post-it notes
Share Market News

Here are the 3 most heavily traded ASX 200 shares on Wednesday

Guess which ASX 200 sector is dominating the market's volume charts today.

Read more »

Business woman watching stocks and trends while thinking
Share Market News

5 things to watch on the ASX 200 on Wednesday

It will be another busy day on the ASX 200 on Wednesday...

Read more »

Two couples having fun racing electric dodgem cars around a track
Share Market News

Here are the top 10 ASX 200 shares today

These 10 ASX 200 shares outperformed all others on Tuesday.

Read more »