Amp Shares Surge

Illawarra Mercury

Tuesday March 21, 2000

Ongoing speculation of a takeover sparked a seven per cent-plus surge in insurance giant AMP Ltd's shares yesterday.

The shares closed $1.225 higher at $16.91, on volume of 2.8 million shares traded, their highest level since December 28, last year.

Traders said continuing talk in the market that AMP could be a takeover target of National Australia Bank has buoyed the stock.

``I think we are just seeing a bit of consolidation in terms of everything that has happened with the stock over the last couple of weeks," one equities consultant said.

The consultant, who did not want to be named, said the stock had risen on a relatively low volume, which indicated there was no great shift in perceptions of the company.

``The valuations put out last week show just how hard it is to come up with an accurate value, in the short or long term, for the company," he said.

Reynolds & Co director Grant Williams said the low volumes meant the rise was probably not specific to any major new issue about AMP.

``If something big is on the horizon or there is a bit of talk in the market you would see much higher volumes," he said.

AMP has been at the centre of market focus over the past two weeks following the $8billion scrip-for-scrip merger proposal between Commonwealth Bank of Australia Ltd and Colonial Ltd.

Market watchers believed AMP could be a target of NAB if the bank was keen to match the CBA/Colonial deal.

Last week AMP was also subject to two dramatically different analyst reports. The first, by BNP Equities, initially valued AMP shares at $12 with a sell recommendation, an assessment which was revised after talks with the company.

The second assessment, by Warburg Dillon Read, gave AMP shares a value of $32.63 each, with a large takeover premium included in the valuation.

© 2000 Illawarra Mercury

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