French insurance giant AXA said Monday it would raise capital of two billion euros (3.0 billion dollars) to finance takeovers, particularly its Australian branch AXA Asia Pacific Holdings.
“We want to go on the offensive,” Henri de Castries, chairman of AXA’s management board, told reporters, adding that it was “the right moment” to act because of a stabilisation in the macroeconomic climate.
“AXA has resisted the financial crisis well,” de Castries said. “In the coming quarters, we think there will be a certain number of opportunities, especially in emerging markets,” he added.
The new shares, with preferential rights for existing shareholders, would be offered at 11.90 euros each, a discount of 29.5 percent to the closing price on Friday, from November 10 to 23.
AXA said the money would be used to seize opportunities for takeovers, mainly on markets with strong growth potential.
AXA said part of the strategy involved negotiations with the London-based European Bank for Reconstruction and Development (EBRD) to buy up minority stakes in some of its own subsidiaries in central and eastern Europe.
The EBRD holds an average stake of 30 percent in such subsidiaries, according to de Castries.
Shares in AXA ended up 0.41 percent at 16.95 euros on the Paris stock market, where the CAC 40 index showed an overall gain of 2.11 percent.
On Sunday, AXA made an offer to buy the 45-percent stake of shares it does not already own in Axa Asia Pacific Holdings. It made the bid in partnership with Australian insurance and wealth management group AMP. The headline value of the complex offer was 11 billion Australian dollars (6.8 billion euros, 10.1 billion dollars).
On Monday, AXA APH rejected the offer on the grounds that it significantly undervalued the business. The rejection came from a council of independent administrators, which is a part of the main board on which AXA has a majority.
A source close to the matter told AFP that “talks are continuing and AXA could make a higher offer.”
With AFP, Paris, November 9, 2009
