In a letter to the TRU board, EQT made a revised proposal conditional on due diligence including TRU providing information equivalent to that provided to other partners so as to ensure “a level playing field for EQT to consider proceeding with the revised proposal”.
The proposal comes after a bid by Perpetual for TRU, which Perpetual estimated would result in at least $15 million per annum in synergies from acquiring the company.
Speaking with InvestorDaily, EQT managing director Robin Burns said EQT had based its original offer on the assumption of up to $8 million per annum in synergies, but access to due diligence could see this figure change.
“We made that original estimate of $8 million [based on] a number of factors, looking from the outside,” Mr Burns said. “That number also reflected a discussion that TRU had with us and that was a number that they themselves had thought was reasonably achievable.
“Perpetual have had the benefit of due diligence in coming up with that figure, so we’re simply asking for similar access to data and as a result of that we might be able to anticipate a higher level of synergies than the $8 million.
“That would simply improve our offering,” he added.
The revised proposal offers 37 EQT shares for 100 TRU shares, up from 33 EQT shares in the previous offer, plus a special dividend of 22 cents per share, representing a 12 per cent increase from the original offer.
EQT also said they are assessing the possibility of including a cash component in any higher offer which may allow TRU shareholders to receive a proportion of the revised proposal in cash.
Mr Burns said the revised offer by EQT would provide a greater share of benefits for TRU shareholders who would own approximately 62 per cent of the value of the combined group rather than 8 per cent of Perpetual under its proposal.
“So it really is the difference between 60 per cent of $8 million and 10 per cent of $16 million and that’s a pretty clear gap,” Mr Burns said.
“I’ve had a number of calls from TRU shareholders over the past month or two since we started our process and they’re all very keen to see EQT and TRU combined.”
“We’ve taken that encouragement and feedback into consideration.”
In a response on the Australian Securities Exchange website, TRU said it would consider the merits of the revised EQT proposal and will “announce its intentions in due course”.
