investor daily logo

Regal abandons plan to acquire Pacific Current

3 minute read

The alternatives investment manager is walking away from a potential takeover.

Regal Partners has abandoned its plan to acquire Pacific Current Group, two months after the takeover bid was first publicly unveiled.

In late July, Regal confirmed it had provided Pacific Current with a non-binding indicative proposal (NBIO) to acquire all shares in the company by way of a scheme of arrangement.

But in an ASX statement on Thursday, Regal said it has been “consistently disappointed with the engagement by the Pacific Current board” since submitting an initial NBIO in March.

“Based on the manner in which Regal’s re-affirmed NBIO has been received, Regal has little confidence in the process being run,” Regal said.

“For these reasons alone, Regal has formally withdrawn its NBIO to acquire Pacific Current.”

Regal said it has received “limited and high-level due diligence information” from Pacific Current following the submission of its initial NBIO. The ASX-listed specialist alternatives investment manager re-affirmed its NBIO in mid-September.

In spite of the latest development, Regal noted that its view of the value of Pacific Current remains unchanged and said that an acquisition could provide strategic benefits to both Regal and underlying Pacific Current affiliates.

“Regal continues to be a substantial shareholder in Pacific Current and remains excited about the prospects of its underlying affiliates,” it said.

“Regal’s growth-focused strategy remains unchanged with multiple organic and inorganic opportunities to execute on its ambition to be a leading provider of alternative investment strategies. Regal will continue to assess these opportunities prudently as and when they arise.”

Following the announcement on Thursday, Regal’s share price closed up 6.85 per cent to $2.34. Meanwhile, Pacific Current’s share price plummeted 9.38 per cent to $10.15.

Under Regal’s now abandoned proposal, Pacific Current shareholders would have received 2.2 shares in GQG and $7.50 in cash per Pacific Current share, with an implied value of $10.77 per share or a total of around $555 million.

“This proposal represents a transformational growth opportunity for both Regal and Pacific Current and one that we believe would create meaningful long-term value for both shareholders and clients,” Regal chief executive officer and managing director Brendan O’Connor said in July.

“A transaction would combine the scale, operational expertise, and fundraising networks of Regal with Pacific Current’s highly attractive and globally diverse portfolio of ‘GP stakes’ in leading alternative asset managers.”

GQG also announced its intention to submit a proposal to acquire Pacific Current shortly after Regal’s proposal, but the company has yet to provide any further update on the matter.

Jon Bragg

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.