๏“ ย ย Back
~
2
min read
ยท Posted on
February 21, 2024

The infamous AMP (TY Banking RC) could be flogging its real estate operations to property giant Dexus

You might remember AMP from the Banking Royal Commission, and now it's selling off another arm.

What's the key learning?

  • Demerging can pack a punch in 'separation costs'.
  • Opting for a sale instead can save shareholders a lot of money in the short term.

๐Ÿ‘‰ Background: AMP is the Aussie financial services company you might remember from the beating it copped in the Banking Royal Commission. Ya know... the crew who were charging fees to dead customers?

๐Ÿ‘‰ What happened: AMP has been slowly selling off its business divisions. While it had plans to demerge its private markets business into a new ASX-listed company...those plans have changed.

๐Ÿ‘‰ What else: Instead, major property investor Dexus has reportedly swooped in to acquire all that biz (and then some). Bye-bye demerger...hello potential juicy sale.

๐Ÿ”” What's the key learning?

๐Ÿ’ก While demergers can often create value for shareholders in the long run... they can actually cost shareholders in the short-term.

๐Ÿ’ก Woolies incurred separation costs of $50 million to split from Endeavour Group ๐Ÿ˜ฑ. And the Endeavour crew had to spend $47 million to become a new company.

๐Ÿ’ก AMP demerging its private markets biz was set to cost shareholders around $200 million. But with Dexus stepping in, that $200 million can instead be saved, and re-invested into AMP's core business.

Ready to win at money?

Sign up for Flux and join 100,000 members of the Flux family

A button to App StoreGoogle Play store button
Excellent ย 4.9 out of 5
Star rating