Pendal (ASX:PDL) shares zoom 23% on Perpetual (ASX:PPT) takeover offer

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Highlights

  • Perpetual has proposed Pendal through a conditional, non-binding indicative proposal to acquire 100% of its shares.
  • Perpetual requested for a pause in trading on ASX after this news to make a further announcement.
  • Pendal's shares skyrocketed 22.99% on ASX today on the back of the news.

Australian asset manager Pendal Group Ltd (ASX:PDL) informed on ASX today (4 April 2022) that the company has received a takeover proposal from financial-services firm Perpetual Ltd (ASX:PPT).

As per the statement, Perpetual proposed Pendal by way of a conditional, non-binding indicative proposal to acquire 100% of Pendal's shares.

On the back of the news, Pendal's shares were skyrocketing 22.99% on ASX today at AU$5.51 each at the time of writing this article.

Further, Perpetual requested a pause in trading on ASX after this news to make a further announcement.

Value of the deal

The Indicative Proposal is for 1 Perpetual share for every 7.5 Pendal shares, plus AU$1.67 in cash for each Pendal share. Based on the closing price of Perpetual shares on the ASX on 1 April 2022, this represents an indicative value of AU$6.23 per Pendal share.

The deal values Pendal at around AU$2.4 billion (US$1.8 billion).

The Indicative Proposal's value will change daily following the Perpetual share price. Pendal stockholders would own about 48% of the combined firm based on the proposed component of scrip consideration.

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Data Source- Companies’ announcements dated 4 April 2022

The board of directors of Pendal stated it is reviewing the offer and that shareholders do not need to take any action.

Global asset managers' trading values have been damaged by geopolitical uncertainty, the economic repercussions of the Covid-19 pandemic, and broader market volatility, according to Pendal, and present valuations may not reflect their long-term potential.

Perpetual resumes trading, what’s the update?

Perpetual confirmed that it has submitted an offer to buy Pendal. It further said the combined group will be well-positioned to grow its asset management businesses across all key markets and channels, gain improved leverage and scalability across a unified business platform, deliver high-quality client service, and increase innovation while significantly improving both companies' growth profiles.

Perpetual's shares were trading at AU$32.36 apiece, down 5.47%.

Goldman Sachs is the financial adviser, and Herbert Smith Freehills acts as a legal adviser to Perpetual on this deal. 

About Pendal Group

Pendal Group (Pendal) is a global investment manager which focuses on active management to produce superior investment returns for customers. The company manages AU$135.7 billion in FUM through J O Hambro, Europe, UK & Asia; JOHCM USA; Pendal Australia; Regnan and Thompson, Siegel & Walmsley (TSW) handle as of 31 December 2021.

With the latest announcement, the company's share price has come back to track as it was in starting of this year. Today, there is just a 1% fall in its YTD share price when writing this article, which fell to AU4.04 per share on 8 March 2022.

Perpetual and its 1HFY22 highlights

Australia-based financial services company Perpetual operates in asset management, financial advisory and trustee services.


 


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