Australian capital markets company Pendal Group has received a conditional, non-binding offer from investment advisory firm Perpetual to acquire 100% of its shares.
The bid is for a consideration of one Perpetual share for every 7.5 Pendal shares plus A$1.67 cash for each Pendal share, which represents an indicative value of A$6.23 (£3.5, $4.6, €4.2) per Pendal share – based on the closing price of the advice firm’s shares on the Australian Stock Exchange (ASX) on 1 April 2022. Click here to see a business directory in Australia.
The total sum proposed was not disclosed as the value “will fluctuate daily in line with the Perpetual share price”, the investment management firm said.
Under the proposition, Pendal shareholders would own around 48% of the merged business, if the acquisition will go ahead.
The bid is subject to customary M&A conditions.
Covid impact
Pendal said in an ASX filing: “The Pendal board notes that the indicative proposal has been put forward at a time when significant geo-political instability, the economic impact of the ongoing covid-19 pandemic and broader market volatility has disrupted the global markets in which Pendal operates.
“This has materially impacted the trading values of global asset manager which may not currently reflect their long-term potential to deliver attractive returns to investors.
“The board of Pendal has commenced an assessment of the indicative proposal, considering the value of Pendal on a strategic and control basis. The board is also carefully assessing the outlook for Perpetual and the proposed combined group given the significant scrip component of the proposed consideration.
“The board will consider all of these factors to ensure it acts in the best interests of shareholders as it assesses the indicative proposal as well as assessing alternative opportunities for Pendal.
“The directors will keep shareholders and the market informed of further developments as they occur.”
Growth plans
Perpetual added in a separate ASX filing: “Under the proposal, these two highly complementary businesses would combine to create a leading global asset manager with significant scale, diversified investment strategies, strong ESG capabilities and a world-class global distribution network, complemented by high quality wealth management and trustee businesses.
“The combined group will be well placed to grow its asset management businesses across all key markets and channels, gained improved leverage and scalability across a unified business platform, delivering high quality client service, greater innovation, whilst meaningfully enhancing the growth profile of both companies.
“The proposal aligns with Perpetual’s strategy to grow its business globally and is strategically and financially compelling, with an initial estimate of approximately A$50m of run-rate pre-tax annual cost synergies expected (subject to due diligence), creating a clear leader in the Australian asset management market.
“There is no certainty that the proposal will lead to any agreement or transaction. Perpetual remains focused on executing its stated growth strategy. This includes evaluating various opportunities consistent with its strategy of acquiring complementary capabilities to position it well for future growth, and which are accretive to shareholder value.
“Perpetual will keep shareholders informed in accordance with its continuous disclosure obligations.”
