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 that 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.
Earlier this morning (Thursday, 17 November), the companies announced they had agreed on updated terms for the deal.
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.
The deal, however, remains subject to an independent expert determining whether the scheme is in the best interests of Pendal shareholders.