NAB completes due diligence on Axa

National Australia Bank's (NAB) A$13.2-billion bid for Axa Asia Pacific has some way to go but, the Australian-listed financial services group surprised analysts on Thursday when it forecast 2009 after-tax profits of A$675 million which are 22 per cent higher than what analysts expected.

According to analysts the Axa forecast underlines why Axa Asia Pacific remains an attractive target for acquisition.

NAB last month trumped a A$12.8 billion bid for Axa by AMP, the Australian wealth manager and also secured a recommendation from Axa Asia Pacific's board.

But what is still not clear is the role of Axa, the French insurer which holds a 54 per cent stake in its Australian namesake. AMP had bid in conjunction with Axa however, their exclusive partnership is due to end in just over two weeks.

The French are keen on Axa Asia Pacific's fast-growing Asian operations while the Australian groups want the more mature antipodean businesses.

But it makes no difference to the French which Australian group they tie-up with and therefore they would not mind switching allegiance to NAB unless AMP comes out with a more lucrative offer, which may be tricky, analysts add, given the company had described it offer as the best and final.

Analysts point out a further complication in the tussle for the company. They say the Australian competition watch dog is due to hand down its findings on AMP in less than three weeks and on NAB on 18 March.

Meanwhile, an early hurdle to National Australian Bank's (NAB's) acquisition of Axa Asia Pacific was cleared with NAB and Axa Asia Pacific informing the completion of confirmatory due diligence to the Australian Securities Exchange yesterday.