NAB has to make do with smaller AMP stake

National Australia Bank yesterday fell short of taking a 15 per cent stake in AMP but is still thought to be laying the groundwork for a multibillion-dollar takeover bid once the Australian life insurer is rid of its ailing UK businesses.

Australia's largest bank bought a 2.3 per cent stake in AMP for A$206m (£84m), having placed an order through Citigroup and JB Were to buy 11.4 per cent. It had to pay A$6 a share for the stake, a 16.5 per cent premium to AMP's closing price on Wednesday of A$5.15. NAB now holds a 5.4 per cent stake in AMP.

Frank Cicutto, NAB's chief executive, described the stake as a "strategic investment" for the bank, as shares in the insurer have hit record lows in the past few weeks. But he added that he awaited the "detailed information to be provided in AMP's demerger documents". "The National has no interest in acquiring AMP while AMP owns its UK businesses," Mr Cicutto said. NAB owns the Yorkshire, Clydesdale and Northern Banks in the UK.

AMP's UK businesses - including Pearl Assurance, London Life and Henderson Global Investors - are planned to demerge from the Australian arm by the end of the year.

AMP shares rose 23 per cent yesterday to close at A$6.35.