Australia’s Pendal Group said on Monday it had received a non-binding takeover offer from asset manager Perpetual Ltd valuing it at A$2.4 billion ($1.80 billion), sending shares of the investment management firm up to 24% higher.
Under the proposal, Pendal’s shareholders will receive one Perpetual share for every 7.5 Pendal shares they hold, along with A$1.67 in cash, taking the offer price to A$6.23 per share, a premium of 39.2% to the stock’s last close of A$4.48.
Pendal, a former subsidiary of Westpac Banking Corp, said it had commenced an assessment of the offer, which comes at a time when geopolitical instability and the pandemic have impacted the trading value of asset managers.
Separately, Perpetual confirmed the proposal and said initial estimates showed about A$50 million of run-rate pre-tax annual cost synergies.
The “two highly complementary businesses would combine to create a leading global asset manager with significant scale, diversified investment strategies, strong ESG capabilities,” Perpetual said.
Shares of Perpetual fell about 6% as trading resumed after a halt in the morning, and were on track for their worst session since February 2021.
Pendal shares, which had fallen about 20% this year until Friday’s close, recouped most of the losses by climbing to A$5.56 in their biggest intraday percentage jump since March 2020.
Goldman Sachs is acting as financial adviser and Herbert Smith Freehills as legal adviser to Perpetual on the deal.
- Reuters with additional editing by Jim Pollard
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