After Pendal initially rejected Perpetual’s takeover proposal in April, the two ASX-listed fund managers will now combine to create a $200 billion entity with the latter more than doubling its assets under management.
Perpetual announced a $2.4 billion takeover bid in April, which was rejected a week later after Pendal’s board deemed it wasn’t in the best interest of shareholders.
The offer has been increased to $2.5 billion and Perpetual will add $111 billion in AUM.
The deal still requires shareholder approval and is targeted to be implemented by later this year or early next year at the latest.
In an announcement to the ASX on Thursday morning, Perpetual stated its goal is to create a global leader in ESG investing and asset management with an enlarged global distribution team.
Perpetual chief executive Rob Adams will lead the combined group and three Pendal directors will be invited to join the Perpetual board.
“The combined group will have premium, respected brands domestically and globally, strong cultural aligned based on the continued investment autonomy within each boutique, will be a global leader in active ESG asset management and will have a materially enlarged global distribution team to drive improved future growth,” Adams said.
Pendal shareholders will receive one Perpetual share for every 7.5 Pendal shares $1.97 per share which will be reduced by any final dividend paid out.
The offer implies a price of $6.02 for each Pendal share based on the closing share price of Perpetual on 24 August of $30.30.
Quelling concerns
Communicating to clients, Pendal Australia chief executive Richard Brandweiner moved to ensure little will change.
“[The acquisition] is strongly supported by our fund managers, given Perpetual’s commitment to preserve our culture of investment independence and the autonomy of our investment management teams,” Brandweiner said.
He said all key brands and investment teams will be retained while investment strategies and processes will remain unchanged.
Additionally, there will be no change to the Pendal representatives that clients deal with on a day-to-day basis.
The group plans to release more information from its portfolio managers and investment teams in the coming weeks.
“We believe the proposal would create Australia’s pre-eminent global asset manager, with client benefits deriving from greater scale across client service, distribution, technology and infrastructure.”
