Looking to buy AMP shares? Here’s the latest blow to the company’s major divestment

The AMP Ltd (ASX: AMP) share price is in the red on Tuesday amid potentially disappointing news for those invested in the company.

The financials giant revealed the much-anticipated sale of its Collimate Capital businesses – announced more than six months ago – won’t meet a November deadline.

At the time of writing, the AMP share price is 0.79% lower at $1.26. For comparison, the S&P/ASX 200 Index (ASX: XJO) has fallen 0.19% this morning.

Let’s take a closer look at the latest on the company’s major divestment.

Collimate Capital sales face regulatory delays

The AMP share price is sliding today amid the release of an update on its planned sale of Collimate Capital.

As the company previously announced, Dexus Property Group (ASX: DXS) will take on the business’ domestic infrastructure equity and real estate leg, while DigitalBridge will take on its international infrastructure equity segment.

The sales were previously expected to complete in September and November, respectively. Sadly, that’s now off the cards.

In a non-price-sensitive release today, AMP said “significant progress” has been made towards the sales’ conditions. However, regulatory processes are ongoing. That means the sales won’t be completed this month. AMP continued:

All parties are working constructively together towards completion, and we will update the market on the likely completion dates for both transactions as these approvals progress.

Both sales are conditional on regulatory approvals and various other consents. The sale to Dexus also requires approval from regulators in China due to AMP’s interest in China Life AMP Asset Management.

Together, the sales will bring $712 million in upfront cash payments. AMP intends to return most of the proceeds to shareholders.

Dexus might also be liable for up to $20 million in earn-outs. That’s down from a potential $300 million, mainly due to the loss of control of the AMP Capital Retail Trust and the AMP Capital Wholesale Office Fund.

The maximum potential earn-out for the international infrastructure business is $180 million.

AMP share price snapshot

This year has been good to the AMP share price. It lifted to an 18-month high of $1.30 on Monday.

It has gained 26% year to date and 9% since this time last year. Though, the stock is still trading for 75% less than it was in November 2017.

For comparison, the ASX 200 has fallen 6% in 2022 so far and 5% over the last 12 months.

The post Looking to buy AMP shares? Here’s the latest blow to the company’s major divestment appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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