2nd UPDATE: AXA APH, National Australia Bank Nearing Agreement

National Australia Bank Ltd. (NAB.AU) and AXA Asia Pacific Holdings Ltd. (AXA.AU) said Monday they are close to reaching an agreement on how the bank and wealth management firm's French parent AXA SA (AXA) plan to carve up the assets of the target under NAB's A$13.3 billion takeover bid.

The two companies said their self imposed deadline for finalizing transaction documents has been extended from Monday until March 29, just three days before the Australian Competition and Consumer Commission is due to rule on the now defunct rival proposal for AXA APH from AMP Ltd. (AMP.AU), and well in advance of the ACCC's expected decision on NAB's bid.

The ACCC's ruling is a key remaining hurdle for the deal and also a possible opportunity for AMP to reenter the takeover tussle should the regulator block NAB's proposal or place onerous restrictions on the deal.

One analyst at a Sydney-based research house said the relatively short extension ot March 29 may mean the parties are close to reaching an agreement, or could equally be driven by AXA APH's desire to have an agreement ahead of any ACCC findings.

"The discussions to agree final transaction documents to implement the proposal between AXA APH, NAB and AXA SA are at an advanced stage," AXA APH and NAB said in separate statements.

AXA APH said its independent directors continue to recommend the NAB takeover proposal, which offers either A$6.43 per share cash or a combination of cash and NAB shares valued at A$6.25 based on NAB's closing price Monday, in the absence of a higher bid and subject to the endorsement of an independent valuation.

A spokeswoman for AXA APH said "the transaction remains on track," but would not comment on what remained to be finalized in the discussions between the parties.

A spokesman for NAB also refused to elaborate on their statement, while AXA SA's spokesman had no comment.

Like AMP's earlier bid, NAB intends to retain AXA APH's Australian and New Zealand businesses and on-sell the more valuable Asian assets, led by its Hong Kong life insurance business, to AXA SA, which owns 53.9% of AXA APH.

The short extension to the deadline, which previously expired March 20, suggests both parties may be prepared to ink a deal subject to requisite clearance from regulators in Australia, New Zealand and Asia, where AXA APH operates in seven countries other than Hong Kong.

The ACCC has said it doesn't expect to rule on NAB's Dec. 17 bid until April 22, some three weeks after it expects to give its verdict on the earlier bid from AMP, which has been rejected by AXA APH's directors. The commission reviews the potential impact on the affected industries of any takeover proposal made, and is also reviewing AMP's market position if it loses out on AXA APH.

While AMP has not abandoned hope of securing AXA APH, analysts believe it would run second in any bidding war to the much larger NAB and must hope that the competition regulator would either rule against NAB or impose such onerous conditions on its deal as to make it unpalatable.

A spokeswoman for AMP declined to comment, referring to CEO Craig Dunn's comments in February that the firm is awaiting the outcome of the ACCC reviews.

Shares in NAB closed 19 cents weaker at A$26.71, AMP fell five cents to A$6.26 and AXA APH continued to trade at a discount to NAB's cash bid, but rose one cent to A$6.30.

-By Bill Lindsay, Dow Jones Newswires; 61-2-8272-4694; [e-mail]