AMP offloads non-core assets

AMP has announced the long-awaited disposal of its life insurance, New Zealand and 'mature' Australian businesses. The details, though, are messy, involving a combination of cash proceeds, reinsurance deals, retained equity stakes and an issuance of preference shares. A separate listing of parts of the New Zealand business is also planned.

All up, AMP is expected to receive around $3.45bn, but after break-up costs and 'capital dis-synergies' (we're still trying to get our heads around these), they'll be getting $2.97bn.

The remaining business will be simpler and will have a stronger balance sheet. That will allow management to focus on the troubled wealth management (AWM) business and faster-growing bank and investment management divisions.

AMP also provided a third-quarter update revealing a net fund outflow for AWM of $1.5bn. However, including market movements, AWM's assets under management rose $0.6bn to $132.6bn.

All this news comes as we're undertaking a close look at the stock and we'll have a more detailed review in the next week or two (we plan to add a price guide then). At current prices, though, we're comfortable to upgrade our recommendation from Avoid to HOLD.