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AMP shares up on rumours of Macquarie Group tilt at embattled wealth manager

Shares in beleaguered wealth manager AMP jumped more than 7 per cent following reports the country’s largest investment bank, Macquarie Group, was considering a tilt at the firm.

AMP shares rose 7.69 per cent to $2.66, partly recouping some of their fall of 30 per cent in the days after the company agreed to sell its life insurance unit for $1.9 billion in cash plus equity stakes.

Once one of Australia’s blue-chip companies, AMP has suffered capital outflows and fleeing shareholders after a national inquiry into the banking and insurance industries exposed deep flaws in its governance and ethics.

The Australian newspaper reported Macquarie was considering bidding for the $7.29 billion firm, citing unnamed sources.

Representatives of Macquarie and AMP declined to comment on the rumour.

Shares in Macquarie were flat on Thursday, while the wider market was slightly higher.

“The idea that Macquarie would get back into this … or that they would make a significant decision like this ahead of the uncertainty next year following the conclusion of the royal commission, is to my mind insane,” said Michael McCarthy, chief strategist at CMC Markets.

“That said, it’s quite clear the market has got quite excited about the idea.”

The Government-mandated royal commission of inquiry into financial sector misconduct has already rocked the industry and is expected to deliver its final report in February, potentially recommending structural reforms and prosecutions.

AMP last week revealed a sharp rise in client withdrawals from its wealth management division, its largest, having admitted to the year-long inquiry to charging customers for advice they never received and misleading regulators.

Hugh Dive, chief investment officer at Atlas Funds Management, which owns Macquarie shares, said AMP’s fund management arm might be an attractive target but “there’s a big chunk of something that’s a big mess”.

“There’s a price for everything but you would have to think how much of management’s attention is this going to take,” he said.

Reuters

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