AMP-Dexus deal stalled, terms revised

AMP Limited has issued an update to shareholders regarding its proposed sale of the Collimate Capital domestic real estate and infrastructure equity business to Dexus Funds Management Ltd (Dexus) for approximately $250 million.

The company has revealed it is yet to secure approval from an applicable Chinese regulator for the transfer of AMP’s interest in China Life AMP Asset Management (CLAMP). 

AMP and Dexus had previously agreed to provide each party with the right to terminate the agreement from 27 January 2023 if all necessary conditions were not satisfied. 

However, in lieu of continued “uncertainty” over the future of AMP’s stake in CLAMP, the companies have extended the date for satisfaction or waiver of conditions precedent to 28 February 2023. 

Additionally, if the deal is delayed beyond 26 January, AMP has agreed to lower the purchase price by 10 per cent to $225 million, and forfeit the remaining potential funds under management (FUM) based on earnout (currently $26 million). 

A contingency plan has also been put in place in the absence of approval from the applicable Chinese regulator.

AMP and Dexus have entered into a non-binding term sheet that considers a revised transaction structure with a two-stage completion process.

Under a revised structure, most legal entities (holding the majority of Collimate Capital’s domestic assets and management rights) and employees would be permitted to transfer to Dexus at first completion, prior to the satisfaction of the remaining conditions and by March 2023.

The transfer of the one remaining entity, which currently holds the interest in CLAMP, would take place following receipt of the necessary regulatory approval.

“This alternative transaction approach would be pursued alongside the existing initial transaction structure for maximum flexibility,” an AMP spokesperson said.

Meanwhile, AMP’s sale of the Collimate Capital international infrastructure equity business to DigitalBridge is in the final stage of the formal approval process.

DigitalBridge is expected to assume control of the business by February 2023.