Perpetual said that its takeover talks with global alternative asset management firm Kohlberg Kravis Roberts & Co (KKR) have ended, after the two groups were unable to reach mutually acceptable terms.
“As a result, KKR’s indicative proposal to acquire all of Perpetual’s shares via a scheme of arrangement will not be proceeding,” Perpetual said.
Perpetual first announced on 18 October that it had received an “indicative, incomplete, conditional, and non-binding proposal” from KKR to acquire all of Perpetual’s shares via a scheme of arrangement at $38-40 per share.
Later in the month Perpetual said that the proposed takeover price did not reflect the company’s true value, but that shareholders’ interests would be best served by conducting exploratory discussions and providing limited financial information to KKR.
“These discussions were aimed at exploring whether a satisfactory offer could be developed that addressed key commercial terms and would be capable of being recommended to Perpetual shareholders,” Perpetual said.
“However, the parties have agreed that such an offer by KKR can not be formulated. The board confirms that KKR will not be conducting any due diligence on Perpetual and does not anticipate any further discussions with KKR in relation to the proposal.”
Lincoln Indicators equities analyst Michael Feller said that it was unlikely Perpetual would get a better deal.
“I always found it strange that KKR was making a bid for an Australian equities manager when our dollar was at parity and would have thought Perpetual would have jumped at what was a generous offer of between $38 and $40 per share – over 20 times 2012 earnings,” he said.
“I don’t think you’re likely to get anything better than that as a Perpetual shareholder, especially when Perpetual’s main asset is its team of analysts.”
Perpetual also said that it expects to finalise the appointment of a new chief executive soon.
The current Perpetual chief executive David Deverall announced his resignation in June this year.
Deverall will stay on until a successor is chosen or until 31 March.
