Wesfarmers cash bid for OAMPS

Wesfarmers has made a $700 million cash offer for insurance broker OAMPS Ltd, the industrial company’s first major move since Richard Goyder took over as chief executive in July last year.

The $4.50-a-share offer has been unanimously recommended by the board of OAMPS, which has been a listed entity since 1989. Wesfarmers already has a 9.8 per cent interest in OAMPS via the market and pre-bid acceptances.

According to Wesfarmers, the offer is almost 30 per cent above the weighted average share price for the past three months.

If the transaction proceeds, OAMPS will form part of the Wesfarmers Insurance division, currently run by Bob Buckley and turning over $1 billion a year through its Wesfarmers Federation Insurance, Lumley General Australia and Lumley General New Zealand operations.

The market has been waiting for Mr Goyder to make his mark at Wesfarmers, which has been more of a seller than a buyer lately, exiting major assets such as the Australian Rail Group and its Landmark rural business over the past few years.

The purchase announcement coincided with a KPMG survey which warned that next year would be a challenge for general insurers, with an expected softening of the market after a year of big profits and strong market gains by the larger players.