Takeover talk

Friday 27th September 2002

AMP chief executive Paul Batchelor fell on his sword with the assistance of shareholders and directors as the share price continued its freefall.

AMP stock has become umbilically linked to the fortunes of the UK's plunging FTSE 100 index. Since late March AMP's shares have fallen about 43%.

The company has 70% of its business in the UK, where the index has slumped in tandem with markets around the world.

Last Friday AMP revealed its Pearl insurance subsidiary no longer met the UK Financial Authority's capital adequacy rules and would need a £500 million ($1.65 billion) injection. AMP has calculated every 100-point fall in the Financial Times 100 index reduces its capital adequacy by £120 million and it may have to pump in more money if the index falls below 3700 points.

AMP listed in June 1998 with 274,000 New Zealanders on its register.

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