Perpetual Limited has agreed to revise the cash and scrip consideration mix of its offer to purchase 100 per cent of shares in Pendal Group.
Under the revised terms, Pendal shareholders would receive one newly issued share in Perpetual, in exchange for seven Pendal ordinary shares and $1.65 cash per Pendal share.
Perpetual had previously offered one newly issued share in exchange for 7.50 Pendal ordinary shares and $1.976 cash per Pendal share.
This represents a 16.5 per cent reduction in the cash component.
There has been no revision to the $6.54 offer price, which was based on Perpetual’s undisturbed share price of $34.23 as of 1 April 2022.
Perpetual is also expected to retain majority ownership of the combined group.
“The revised terms further strengthen the balance sheet and enhance the financial flexibility for the combined group,” Perpetual told shareholders.
The Pendal board and management have urged shareholders to accept the revised offer.
“The Pendal Board continues to unanimously recommend Pendal shareholders vote in favour of the Scheme in the absence of a superior proposal,” Pendal chairman Deborah Page AM said.
“The board believes the revised consideration mix is appropriate and for the benefit of shareholders in the combined group. We look forward to continuing to progress the Scheme towards implementation.”
The deal, however, remains subject to an independent expert determining whether the scheme is in the best interests of Pendal shareholders.
The approval of the revised terms comes ahead of an imminent Supreme Court decision expected to clarify terms of compensation if Perpetual breaches the acquisition agreement.
Perpetual shares dive as Supreme Court empowers Pendal
Perpetual Limited’s share price slipped 15 per cent on Thursday (17 November) after the NSW Supreme Court ruled a $23 million ‘break fee’ would not be Pendal Group’s exclusive remedy should Perpetual breach its agreement to acquire 100 per cent of its shares.
As such, Pendal would be permitted to seek orders to enforce Perpetual’s obligations to complete the deal, including via an injunctive relief or orders of specific performance.
The Supreme Court ruling comes amid speculation Perpetual could withdraw its offer to acquire Pendal to pursue an alternative transaction.
Speculation flared following a second “unsolicited” conditional, non-binding indicative takeover proposal from a consortium comprising of BPEA Private Equity Fund VIII and Regal Partners Limited.
The consortium had offered to purchase 100 per cent of Perpetual’s shares on issue for $33.00 cash per share.
But Perpetual has stressed it remains committed to completing its transaction with Pendal, claiming the Supreme Court ruling has provided clarity for “hypothetical situations only”.
The company said it is “working expeditiously” with Pendal to finalise the scheme booklet ahead of the hearing for the Court’s approval in the week commencing Monday, 21 November 2022.
