Perpetual aims for leadership position with Pendal acquisition

On Monday, Pendal revealed it has received a conditional, non-binding indicative proposal from Perpetual to acquire 100 per cent of the shares in Pendal for an indicative $6.23 per share.

In a separate ASX listing, Perpetual confirmed the offer and detailed its intentions.

“Under the proposal, these two, highly complementary businesses would combine to create a leading global asset manager with significant scale, diversified investment strategies, strong ESG capabilities and a world-class global distribution network, complemented by high quality wealth management and trustee businesses,” Perpetual said.

“The combined group will be well placed to grow its asset management businesses across all key markets and channels, gain improved leverage and scalability across a unified business platform, delivering high quality client service, greater innovation, whilst meaningfully enhancing the growth profile of both companies,” it continued.

Perpetual is offering Pendal shareholders 1 Perpetual share for every 7.5 Pendal shares plus $1.67 cash, representing an indicative value of $6.23 per Pendal share.  

The proposal aligns with Perpetual’s strategy to grow its business globally and is said to be both strategically and financially compelling, with an initial estimate of approximately $50 million of run-rate pre-tax annual cost synergies expected, creating a clear leader in the Australian asset management market.

Noting that there is no certainty that the proposal will lead to any agreement or transaction, Perpetual said it remains focused on executing its stated growth strategy.

“This includes evaluating various opportunities consistent with its strategy of acquiring complementary capabilities to position it well for future growth, and which are accretive to shareholder value,” the asset manager said.

Pendal’s board is said to be assessing the proposal, alongside the outlook for Perpetual and the proposed combined group. 

Pendal's share price climbed 20.3 per cent on Monday to $5.39. 

Goldman Sachs and Herbert Smith Freehills are advising Perpetual, while Pendal has engaged Macquarie Capital and King & Wood Mallesons.