VGI Partners (ASX:VGI) & Regal Funds extend Exclusivity Period

March 29, 2022 02:07 PM AEDT | By Sonal Goyal

VGI Partners (ASX:VGI) & Regal Funds extend Exclusivity Period — Image source: © Pattanaphongphoto | Megapixl.com

VGI and Regal merger

On 31 January 2022, the alternative investment manager and VGI inked a non-binding term sheet and entered exclusivity in relation to the proposed merger. At the time of the agreement, the exclusivity period was six weeks.

Australia based, Global equity manager, informed its stakeholders that Regal and VGI have agreed to further extend the exclusivity period of the proposed merger till 1 April 2022. Earlier (15 March 2022), the exclusivity period was extended till 28 March 2022.

Image source: © Bakhtiarzein | Megapixl.com

The exclusivity period is a time frame in which the seller cannot carry out any activities related to the sale of entity to a third party. As per the exclusivity agreed by VGI and Regal, VGI, its employees, and advisors must ensure no shop, no talk and no due diligence on VGI. Moreover, VGI is obliged to inform Regal if the company receives any competing proposal and enclose all the details related to the new competing proposal.

More about the proposed merger between VGI and Regal

With the merger of Australia’s recognised hedge fund managing company, the value of the total funds under management will reach over AU$6 billion, said VGI Partners. In the proposed merger, VGI would acquire Regal, and the acquisition would include a change in the ASX ticker of VGI to reflect a new entity or business.

What is a merger & acquisition (M&A)? Why do companies do M&A?

VGI Partners dividend history

VGI Partners announced a dividend of AU$0.06 per share, which was estimated to be distributed on 16 March 2022. The dividend was fully franked at 30%. Generally, the firm distributes dividends every three months.

The dividend amount represents a 50% payout ratio on normalised net profit after tax (NPAT) for FY21. The dividend announced is in line with the VGI’s intent to keep the dividend payout ratio on NPAT in the range of 50 to 75%.

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The stock performance of VGI Partners

VGI stock performance is not in line with the ASX 200 financial index as it rose by approximately 12% in the last year; however, VGI stock declined by over 54% within a year. The year-to-date decline of VGI shares stand at 22%, and in the last 6-months, the share price decline has been around 40%.

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