AMP Ltd. saw its stock price tumble Thursday after the Sydney-based financial conglomerate revealed that Ares Management, a Los Angeles-based private equity firm, had walked away from a non-binding proposal to buy 100% of AMP's shares.
AMP's stock dropped 11% to A$1.37 ($1.06) with 37.5 million shares changing hands, more than triple the level for any session over the preceding six weeks. The country's S&P/ASX benchmark index ended the day down 0.1%.
"Ares has advised us they will not proceed with their offer to acquire 100% of AMP," Francesco De Ferrari, AMP's CEO, told reporters Thursday, following AMP's release of its calendar year 2020 financial results.
"We are, however, continuing discussions with them in relation to AMP Capital," the firm's money management arm with A$194 billion in public and private market assets under management at the end of 2020, he said.
A review of the AMP Capital business, launched in September, has been completed, confirming that AMP's transformation strategy is the best way forward, he said.
The market's reaction in late October and early November when AMP confirmed that Ares was considering a proposal with an implied value of A$1.85 an AMP share — valuing the firm at almost A$6.4 billion — suggested considerable enthusiasm for allowing new ownership to drive the business forward.
On Oct. 30, the day Ares' tentative offer first came to light, AMP's stock price surged 20% to A$1.53, with a 2020 high of 73.7 million shares changing hands. The share price crested at roughly A$1.74 from mid-November to mid-December.
An Ares spokesman could not immediately be reached for comment.