Australia's Perpetual rejects $1.1b bid from BPEA EQT, Regal

Perpetual said in a filing that the offer of AUD 30.00 per share materially undervalues the business, The board also resolved to push ahead with the AUD 2.5bn acquisition of rival asset manager Pendal Group. BPEA EQT and Regal argue that their offer would deliver a superior outcome for shareholders than a merger with Pendal.

The price represents an 18.5% premium to the November 2 closing price. Perpetual's stock ended November 3 up 14.6% at AUD 29.00. As of early afternoon trading on the following day, it had risen to AUD 29.73. It has reclaimed all of the value lost since the announcement of the Pendal deal.

BPEA EQT and Regal are working together on the bid, but if successful, they plan on splitting up the assets. Regal will take the asset management business – combining it with its own operation to create a platform with more than AUD 90bn in assets under management (AUM) – leaving BPEA EQT with the corporate trust and private client businesses.

Perpetual was founded in 1886 as a trust company and, from the 1980s, expanded into fund management, serving as an external manager for superannuation funds, providing financial advice, and offering corporate trustee and securitisation services. It also grew beyond Australia.

As of June 2022, the international and Australia asset management operations had AUM of AUD 69.1bn and AUD 21.3bn. The financial advisory business had AUD 17.4bn in funds under advice and the corporate trustee business had AUD 1.09trn in funds under administration.

Revenue for the year came to AUD 748.2bn, up from AUD 650.2bn for the 12 months ended June 2021. Underlying EBITDA rose from AUD 214m to AUD 248.5m, while net profit increased from AUD 72.9m to AUD 101.2m. Asset management – international and domestic – accounted for 50.5% of revenue, with financial advisory and corporate trustee contributing 27.5% and 20.6%, respectively.

BPEA EQT officially came into being last month following EQT's acquisition of Baring Private Equity Asia. The firm already has considerable exposure to the corporate services space through Tricor Group and Vistra, which are based in Hong Kong but have broader geographic footprints. Tricor was acquired from Permira 12 months ago for USD 2.76bn.

BPEA EQT is currently deploying its eighth flagship pan-regional fund, which closed in September on USD 11.2bn, up from USD 6.5bn in the previous vintage.

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• Topics
• Australasia
• Financials
• Buyouts
• Australia
• Financial Services
• BPEA EQT
• Baring Private Equity Asia