The A$13 billion bid for AXA Asia Pacific Holdings Ltd. (AXA.AU) hit a possible stumbling block Tuesday when the target's board failed to reach a unanimous agreement on the offer.

AXA Asia Pacific said five of its six independent directors have decided to recommend the bid from its 54% owner AXA SA (AXAHY) and AMP Ltd. (AMP.AU) in the absence of a superior offer and subject to an independent assessment.

One of the directors is seeking further information before deciding whether to back the proposal, potentially further extending the takeover chase that has been underway for more than a year. The bid is conditional on unanimous approval from the independent directors.

AXA SA is "quite happy for the remaining director to get whatever information it is he or she needs," an external spokesman for the French insurer said.

"They have been patient so far," he said.

AMP and France's AXA SA first launched a bid for the Australian unit in November last year. The French insurer later teamed up with NAB to make a higher offer that won over the target's board but was blocked by the competition regulator.

Investors remain hopeful the latest takeover plan will eventually go ahead. AXA APH shares rose 1.3% Tuesday to close at A$6.25.

"Given five of the six (independent directors) have said yes, I'd be surprised if it doesn't go through," said Peter Vann, head of research at Constellation Capital Management. "If the sixth has a valid concern, then the other five probably wouldn't have gone the way they did."

Despite the one board member abstaining, the parties continue to lay the groundwork for a possible deal. AMP expects to begin due diligence on AXA APH this week, a person familiar with the situation said.

AMP plans to keep the Australian and New Zealand assets of AXA APH and sell the Asian business to AXA SA.

The deal is crucial to the French company's global strategy of increasing exposure to developing markets.

Under the proposal, AXA APH minority shareholders would receive AMP shares and cash worth at least A$6.43 for each AXA APH share, subject to the movement of the AMP share price within a certain band.

AXA APH Chairman Rick Allert is among the directors who support the offer.

"A majority of the independent directors believe AMP and AXA SA's proposal provides minority shareholders with appropriate value for their investment in AXA APH, supported by significant downside protection," Allert said in a statement.

"As a result, we believe the proposal is in the best interests of AXA APH minority shareholders," he said.

If all the independent directors agree to back the proposal, it can then be put to a vote by AXA Asia Pacific minority shareholders. It also requires approval by Australian Treasurer Wayne Swan.

AMP welcomed the decision by the five directors to support the bid.

"We understand that one director is seeking further information," said an AMP spokeswoman. "We'll respect this and we'll wait to see what the director decides."

AXA APH said the offer represents a 50% premium to the A$4.30 closing share price of the target on Nov. 6, 2009, the last trading day prior to the announcement of the initial proposal from AMP and AXA SA.

Asked if the suitors would consider waiving the requirement for a unanimous board decision, the AXA SA spokesman said: "That's not a matter for today."

"For today, the thing is to allow time for the independent directors to possibly come to a unanimous view," he said.

-By Rebecca Thurlow, Dow Jones Newswires; 61-2-8272-4679; rebecca.thurlow@dowjones.com

(Cynthia Koons in Sydney contributed to this article.)
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