Scandal-hit Australian investment manager AMP has received an offer for acquisition of 100% of its shares from American private equity firm Ares Management.

The offer is “indicative, non-binding, conditional” bid, and is still at a preliminary stage, stated AMP. The proposed value of the deal was not shared.

According to media reports, AMP’s shares surged over 20% following the news – the most in 17 years – taking its market valuation to A$5.3bn ($3.7bn).

The firm has stressed that the possibility of the deal materialising is still uncertain.

The firm revealed that it was carrying out an portfolio review of its assets and businesses.

The investment manager said: “AMP continues to progress its Portfolio Review announced on 2 September 2020.

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“AMP has received significant interest in its assets and businesses and is assessing a range of options in a considered and holistic manner, including continuing to pursue its three-year transformation strategy, with a focus on maximising shareholder value.”

AMP came under the lens of the banking royal commission after revelations that it charged customers for services they did not receive and misled regulators.

Several of the firm’s senior-level executives, including CEO Craig Meller and chairman Catherine Brenner, stepped down from their roles in the wake of the scandal.

Recently the firm posted its Q3 AuM update, where it said that Australian wealth management (AWM) AuM rose 0.3% to A$121.4bn from A$121bn in Q2 20. AWM reported net cash outflows of A$1.95bn in Q3 20, with another outflows of around A$450m expected in Q4 20 due to a lost corporate super mandate.

AMP Capital’s AuM dropped 0.4% to A$189.2bn in Q3 2020 from A$189.9bn in the previous quarter.

New Zealand wealth management AuM grew 1.2% to A$11.8bn in Q3 20 while New Zealand wealth management net cash outflows fell to A$13m.