Perpetual announces revised KKR proposal

In an ASX listing on Monday, Perpetual said it has received a revised proposal from KKR for its wealth management and corporate trust businesses.

"Since its announcements on 10 December 2024 and 17 December 2024, Perpetual has continued to engage with KKR and confirms it has received non-binding, conditional, indicative proposals from KKR," the fund manager said in response to recent media speculation.

Over the weekend, The Australian Financial Review reported that KKR had returned with an improved all-cash offer, surpassing $8 per share.

However, in a statement to the ASX, Perpetual clarified that the media's description of the latest revised proposal and its value was inaccurate.

"The latest revised proposal and its quantum are not accurately described in the media. It contemplates outstanding commercial terms that would need to be agreed, and the net proceeds shareholders would receive under the revised proposal are uncertain at this stage," it said.

"The Perpetual board is assessing the revised proposal and associated terms and will update shareholders on its engagement with KKR as soon as possible."

The $2 billion buyout deal had been quiet for a moment after concerns were raised that potential tax liabilities could render the proposal untenable and not in the best interests of shareholders.

Namely, in December, the Australian Taxation Office (ATO) provided its "written views" on the tax treatment of the transaction following what Perpetual described as "ongoing and extensive engagement".

The revised tax liability was revealed to range between $493 million and $529 million, a significant increase from the previously disclosed range of $106 million to $227 million. As a result, the estimated cash proceeds to shareholders had been adjusted downward, with the previously communicated range of $8.38 to $9.82 per share revised to $5.74 to $6.42 per share.

To contest the ATO’s position, Perpetual said at the time it would need to withhold funds sufficient to cover the potential tax liability. It warned that such a process would be lengthy, starting only after an ATO assessment, with no guarantee of a favourable outcome.