Platinum Asset Management has confirmed that it received an unsolicited confidential, non-binding, indicative proposal from Regal to acquire all of the shares in Platinum it does not already own via a scheme of arrangement.
Responding to recent media speculation that Regal was eyeing Platinum as its most recent M&A target, Platinum said in an ASX listing that its board is considering the merits of the Regal proposal having regard to the intrinsic value of Platinum in the context of a potential change in control.
Earlier this year, Regal chief executive Brendan O’Connor said the investment manager continues “to monitor a range of opportunities to add additional scale”, including “smaller bolt-ons as well as larger transactions”.
“We have multiple opportunities for growth organically and, if we were to do anything inorganically, we will be very disciplined to make sure it’s highly accretive to shareholders.”
As part of its bid to acquire Platinum, the latter’s shareholders would receive 0.274 Regal shares for each Platinum share held. Moreover, prior to implementation of the scheme, Platinum would be permitted to pay a fully franked special dividend to its shareholders, from its own cash reserves, of 24 cents per Platinum share.
The consideration would be reduced for Platinum’s FY2023–24 final dividend, which was previously announced last month at 4 cents per Platinum share, and any other dividend paid by Platinum other than the permitted 24 cents per Platinum share special dividend.
The proposal is subject to a number of conditions, including the granting of due diligence, the Platinum board recommending the Regal proposal to Platinum shareholders, and entry into a mutually acceptable scheme implementation deed.
In the process of evaluating the bid, Platinum said its board will “have regard to the absolute and relative value of the Regal share consideration being proposed, the potential business costs and benefits of any combination, as well as Platinum’s own capital management plans and alternative strategic options”.
“Shareholders should note that there is no guarantee that discussions with Regal will progress or that due diligence access will be granted or, if it is, that Regal will submit a binding proposal that will ultimately be recommended by the Platinum board,” the firm said.
In the meantime, Platinum clarified that this should not impact its unitholders nor its investment philosophy, and as such, told shareholders not to take any action in connection with the Regal proposal.
Regal took a 5.5 per cent stake in Platinum back in 2022 in a move at the time described as unexpected. The stake was acquired via a number of smaller acquisitions over a period of a few months.
In Regal’s full-year results released last month, it confirmed that its funds under management increased by $4.3 billion in July, following the acquisition of 100 per cent of Merricks Capital and 40 per cent of Argyle Group, bringing pro forma FUM to $16.5 billion – an increase of 50 per cent since 31 December.
