AMP 0.81% $1.22 amp limited

da scoop

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    Aug. 27 (Bloomberg) -- Citigroup Inc. and JBWere Ltd. received an order to buy 11 percent of AMP Ltd., Australia's largest life insurer, for about A$974 million ($625 million), raising speculation National Australia Bank Ltd. or other lenders are seeking to add to their fund management assets.

    The two brokers said they are seeking to buy 174 million shares at A$5.60 a piece, 8.7 percent more than Sydney-based AMP's closing price. National Australia, the country's largest lender, had a A$21.00 a share takeover bid spurned by AMP's board in 1999. AMP stock ended 4.9 percent higher at A$5.15 today.

    ``The implication and speculation is obviously that National Australia is buying the stake,'' said Marcus Padley, a trader at Tolhurst Noall Group Ltd. National Australia spokesman Brandon Phillips declined to comment.

    AMP stock has fallen 76 percent since June 2001, after three years of FTSE 100 Index declines forced it to twice top up capital reserves at its U.K. units, which it plans to spin off later this year. Buying more than 10 percent of AMP would position National Australia to buy AMP after the British businesses are separated.

    Patrick Crabb, head of institutional sales at JBWere, declined to name the client. ``We're in the process of covering all the AMP shareholders. The book build has started.''

    ``There has been speculation that one of the big banks was interested and National Australia has been mentioned,'' Paul Xiradis, who oversees the equivalent of $638 million at Ausbil Dexia Ltd. said. ``AMP stock has come back quite savagely and that's brought predators to the field.'' Xiradis said he may sell his AMP shares.

    Record Loss

    Buying AMP would more than double the A$50 billion that National Australia manages for Australian investors. A full bid at A$5.60 a share values AMP at about A$8.5 billion.

    National Australia paid A$4.6 billion for fund manager Sydney-based MLC in 2000 to boost profit from managing money. The unit was hurt by a 10.7 percent slide in Australia's S&P/ASX 200 Index the past year, which deterred investors, cutting funds under management and fee income.

    Bryan Fitzgerald, a spokesman at Commonwealth Bank of Australia, declined to comment, as did David Lording, a spokesman at Westpac Banking Corp and AMP spokeswoman Karyn Munsie.

    ``National Australia would be a name that would some sense,'' said William Calvert, who helps oversee the equivalent of about $5 billion in equities including AMP shares at Framlington Investment Management in London. ``It's a fair price.''

    Calvert has been approached by Citigroup brokers regarding his stake. The broker told him they didn't know who the buyer of the stake is, Calvert said.

    Last week, AMP said it turned to a record A$2.16 billion first-half loss after writing down the value of U.K. businesses. AMP owns Henderson Global Investors, Pearl Assurance, NPI and London Life in the U.K.

    JBWere and Citigroup said in a statement e-mailed to Bloomberg News they want to complete the order, which is for a minimum of 100 million AMP shares, by 10 p.m. Sydney time.

    Judy Hitchen, spokeswoman at Citigroup, declined to comment.

    Citigroup is the world's largest financial services company. JBWere is Australia's largest closely held securities
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