Australia’s Pendal Considers $1.8 Billion Sale to Perpetual

(Bloomberg) -- Australian managed funds business Pendal Group Ltd. said it is reviewing an indicative takeover proposal from wealth manager Perpetual Ltd for about $2.39 billion ($1.79 billion).

Pendal's board has started an assessment of the proposal that would value the business at about A$6.23 per share, made up of one Perpetual share for every 7.5 of Pendal's plus A$1.67 per share cash on top. Pendal shareholders would own about 48% of the merged company under the terms of the offer, Pendal said.

While the offer marks a premium of 39.2% to Pendal's April 1 closing price, recent volatility has hit public-market valuations of asset managers as a sector worldwide, the company said, indicating the timing of the offer “may not currently reflect their long-term potential to deliver attractive returns to investors.”

“The Pendal Board notes that the Indicative Proposal has been put forward at a time when significant geopolitical instability, the economic impacts of the ongoing COVID-19 pandemic and broader market volatility has disrupted the global markets in which Pendal operates,” the board said in its statement Monday.

Pendal's stock touched a 52-week low last month, having declined 18.7% year-to-date at a time when Australia's S&P/ASX 200 lost 5.28%. Pendal shares shot up as much as 24% on Monday after the news.

The company, which calls itself a multi-boutique manager and managed A$139.2 billion as of last September according to its annual report, has been through many iterations since its beginnings 53 years ago when it was called BT Australia due to its backing by New York-based Bankers Trust Company and local broker Ord Minnett Holdings Pty Ltd. It was subsequently owned by Deutsche Bank AG, then US-based Principal Financial Group, and later Australian lender Westpac Banking Corp, which floated it in 2007.