National Australia Bank Ltd. (NAB.AU) revived its A$13.3 billion bid for wealth manager AXA Asia Pacific Holdings Ltd. (AXA.AU) Monday with undertakings to on-sell the target's innovative retail investment platform North, prompting Australia's competition regulator to re-open its investigation of the deal.

The complex plan by Australia's fourth largest bank to sell North to wealth management rival IOOF Holdings Ltd. (IFL.AU), and provide support to the the fledgling product for at least three more years, will now be scrutinised by the Australian Competition and Consumer Commission to see if it overcomes the regulator's objections.

The ACCC on April 19 rejected NAB's plan to buy the majority-owned unit of French insurer AXA SA (AXAHY), arguing the biggest deal in Australia's financial services history would crimp competition in the market for supply of retail investment platforms, internet portals that link retail investors with the wide range of investment products that fund management companies provide.

"The ACCC now seeks views from market participants to assist its consideration of the undertakings and of IOOF as a proposed purchaser, and to determine whether the proposed divestiture would be likely to alleviate the ACCC's competition concerns," the regulator said in a statement.

The news raised hopes NAB's stalled deal, which has the support of both AXA APH's independent directors and AXA SA, might go ahead. Both AXA APH and IOOF shares rose, while the market appeared to remain concerned that NAB was either paying too much, or perhaps conceding too much, in pursuing the deal. Around 0230 GMT, AXA APH was trading 27 cents or 5.2% higher at A$5.48 while shares in IOOF were 20 cents or 3% firmer at A$6.78 and NAB was down 0.6% at A$24.89.

NAB said the sale of North to IOOF and a range of undertakings relating to the continued supply of customers, funding for planned software and product enhancements and non-compete clauses running for three years were designed to address the ACCC concerns.

"NAB has listened to the ACCC's concerns and taken them into account in developing the divestment proposal," said NAB's head of its wealth management operations Steve Tucker in a statement.

"IOOF is a substantial and experienced platform operator and NAB believes that it will be a capable manager of the North investment platform business."

The undertakings, conditional on the AXA APH takeover deal proceeding, include an arrangement to ensure IOOF access to the "Bluedoor" software from U.S. software developer DST Systems Inc. (DST) that underpins the platform. They also include an arrangement to fund existing planned enhancements to the software to support an expanded range of functions. These functions include the provision of model portfolios, term deposits and a direct equities capability.

IOOF will also exclusively provide platform administration services to AXA APH for the North products for at least three years after the planned enhancements to the platform, which currently holds around A$1.4 billion in funds under administration.

IOOF didn't disclose the purchase price for North, but said the financial effect of the deal is "not material," and is expected to be immediately accretive to its per share earnings.

The ACCC said it has commenced market consultation on the undertakings by NAB and will take public submissions until Aug. 23 ahead of an expected decision on Sept. 9.

Under NAB's proposal, 55% owner AXA SA would retain the Asian assets of AXA APH, while minority shareholders would be given the choice between A$6.43 or 0.1745 NAB shares and A$1.59 for each of their shares in the target.

The developments continued to sideline wealth management and life insurance firm AMP Ltd. (AMP.AU) who's November cash and scrip offer of 0.6896 of its own shares and A$1.92 for each AXA APH share was trumped by NAB. Its shares were 11 cents or 2% firmer at A$5.53.

-By Bill Lindsay, Dow Jones Newswires; 61-2-8272-4694; bill.lindsay@dowjones.com
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