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Key points
- The AMP share price is up 1.71% on Thursday, trading at 89.5 cents
- The gain comes amid reports that the company is looking for acquisitions to boost its assets after its planned demerger
- Said to be on its wish list is CBA's 45% stake in Colonial First State
The AMP Ltd (ASX: AMP) share price is in the green today amid reports that the company is debating acquiring a stake in superannuation and wealth manager, Colonial First State.
Market watchers might be familiar with Colonial. It's currently owned in part by the Commonwealth Bank of Australia (ASX: CBA).
At the time of writing, the AMP share price is 89.5 cents, 1.71% higher than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) is in the red right now, having slipped 0.91%.
Let's take a closer look at the financial services company's rumoured acquisition target.
AMP share price gains amid acquisition rumours
The AMP share price is gaining on Thursday. At the same time, the market might be digesting claims the company is shopping for assets ahead of its planned demerger.
According to reporting by The Australian, AMP is sussing out the potential acquisition of CBA's share of Colonial First State. The purchase would boost the size of AMP's wealth management and banking divisions after it splits from its private markets business.
CBA sold 55% of the superannuation and wealth manager to private equity firm Kohlberg Kravis Roberts (KKR) in May 2020. The bank announced the sale alongside a trading update for 2020's March quarter.
The majority stake cost KKR around $1.7 billion, implying a total valuation of $3.3 billion.
As The Australian notes, AMP will likely need to undergo a capital raise to afford CBA's remaining stake in Colonial First State.
The embattled company could also reportedly be looking to purchase BT Panorama from Westpac Banking Corp (ASX: WBC). The wealth management platform is expected to have a price tag of at least $1 billion.
According to CommSec, AMP had a market capitalisation of around $2.8 billion as of its previous close.
The AMP share price has been tumbling over recent years, likely spurred by the 2018 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Since the end of 2017, the financial services company's stock has slumped 82% – hitting a new record low of 87 cents on Wednesday.
