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Platinum Asset Management Ltd (ASX:PTM) shares are soaring this morning, surging 16% to AU$1.15 following news of a potential takeover offer from Regal Partners Ltd (ASX:RPL).
Key Details of the Proposal
The fund manager's shares skyrocketed after confirming the receipt of an unsolicited, confidential, non-binding, and indicative proposal from Regal Partners. According to the announcement, Regal Partners has offered an exchange ratio of 0.274 Regal shares for each Platinum share.
Based on Regal Partners' share price at the close of the previous session, the offer values Platinum shares at 90.42 cents each. However, the proposal goes further. Platinum shareholders would be permitted to receive a fully franked special dividend of 24 cents per share, which would be paid from the company’s cash reserves prior to the implementation of the scheme.
This combination brings the total offer value to approximately AU$1.1442 per share, representing a 15.6% premium on Platinum’s closing price from the prior day.
Terms and Conditions of the Offer
While the offer is attractive, it does come with several conditions. For the proposal to progress, Platinum must grant due diligence to Regal Partners. Furthermore, the Platinum board must recommend the proposal to its shareholders, and both companies must agree on a mutually acceptable scheme implementation deed.
The proposal would also need to pass through various customary approvals, including endorsements from shareholders, the court, and regulatory bodies.
It’s important to note that the proposed consideration could be reduced by Platinum’s fiscal year 2024 final dividend of 4 cents per share and any other dividends paid, except for the special 24-cent dividend.
What’s Next for Platinum?
In response to the proposal, the Platinum board stated it is carefully evaluating the merits of the offer. The assessment includes analyzing Platinum's inherent value as a standalone entity, particularly in the context of its ongoing turnaround strategy, future growth initiatives, and broader outlook.
The board also emphasized the need to assess the absolute and relative value of Regal Partners’ share-based offer, as well as the potential costs and benefits of merging the two businesses. Other factors under consideration include Platinum’s capital management plans and any alternative strategic options available to the company.
For the time being, the company has reassured its shareholders that there is no immediate impact on its operations or its investment philosophy. Platinum continues to focus on executing its strategy as planned.
