AMP braced for more UK pain

AUSTRALIAN insurer AMP has ended a disastrous decade-long foray into Britain with a fresh blow to investors, saying it may have to increase the write-off on its British operations.

The warning came as shareholders voted in favour of a A$10bn (£4.27bn) plan to split off the British businesses, which include Pearl, NPI and Henderson Global Investors.

More than 97% of proxy votes supported the demerger. Votes from the 200-odd shareholders at today's extraordinary general meeting in Sydney still be counted also appeared heavily in favour.

AMP's British business is to renamed HHG and its shares listed in London and Sydney from 23 December. AMP said it would have to raise its A$2.3bn write-down for HHG if the shares trade below the company's A$1.70-A$1.80 valuation. Analysts say HHG could trade at less than A$1.

'This [write-down] figure will be higher if HHG trades initially below our valuation,' said AMP chairman Peter Willcox. 'Realistically, I think there will be some volatility in the initial trading of both AMP and HHG and there is potential for HHG to be undervalued by the market in its early days.

'In terms of the impact the value of HHG will have on the AMP Group results for 2003, we expect it will have a considerable negative impact.'

AMP shares fell 2%. The group, which will retain a 15% stake in HHG until at least 2005, is bracing for a A$4bn loss for the year to December. The spin-off is expected to put AMP into play.

AMP executives at today's meeting were quizzed about whether or not City 'Superwoman' Nicola Horlick will be joining it, after reports the deal has fallen through.

But chairman Peter Willcox refused to be drawn, saying: 'We have talked to Nicola Horlick, and we are [still] doing so. We haven't signed a contract with her, but our intention is to find the very best person for our business.'

In response to questioning on Horlick's reputed salary offer of £340,000, Willcox said: 'We don't intend to enter a contract with anybody that would, I think, be considered excessive. I can give you an assurance that we have no intention of giving golden handshakes.'

Horlick, believed to be in Sydney, could not be contacted for comment.