At the time, D’Aloisio underscored the emotional and historical significance of selling the Perpetual brand, which has been a cornerstone of Australia’s financial services landscape for 138 years.
“The price included negotiated value for the brand,” he said, emphasising the importance of securing the best outcome for shareholders and employees.
However, he flagged that regulatory approvals and discussions around taxes and duties could slow the process.
“As soon as we get a clearer line of sight and certainty on these, we will be able to update the market,” he said.
Fast forward to Tuesday, and the picture has dimmed for shareholders. Perpetual confirmed a sharp revision in the estimated cash proceeds from the sale, cutting the range from $8.38–$9.82 per share to a significantly lower $5.74–$6.42 per share.
Back in October, D’Aloisio had hinted at the possibility of such adjustments, noting that the earlier figures were indicative and “based on the information available at the time”.
Also at the time, he thoughtfully outlined shareholders’ options, emphasising they could either support the deal or vote against it, opting instead to retain the company’s three core businesses.
He also made it clear that delays were a possibility, explaining that while the goal was to bring the proposal to a vote by early 2025, “there are matters which are outside our control and involve third parties such as regulatory approvals and finalisation of discussions on taxes and duties”.
Now, it seems, those final discussions have reached a critical juncture.
Namely, on Tuesday, the asset manager said it is in discussions with KKR to assess the implications of a significant tax revision related to its asset sale to the private equity giant.
The discussions follow the Australian Taxation Office (ATO) flagging concerns that could substantially increase the deal’s tax liabilities.
The revised tax liability now ranges between $493 million and $529 million, a sharp increase from the previously disclosed $106 million to $227 million.
The asset manager also flagged the chance that the deal with KKR may not proceed given the revised tax bill, noting it remains subject to the satisfaction of a number of conditions precedent.
The possibility of the deal falling through was raised earlier by former CEO Rob Adams, who said in August that the board was managing contingency plans.
“It’s not the outcome we expect, but we are managing them,” he said.
To offset the blow, Perpetual provided a business update on Tuesday. Its asset management division grew assets under management by 3 per cent to $222.3 billion in the first quarter of FY2024–25. Corporate trust increased funds under administration by 1 per cent to $1.2 trillion and wealth management’s funds under advice rose 3 per cent to $20.4 billion.
“Each business continues to deliver benefits to Perpetual’s shareholders. Since the start of the second quarter of FY25, corporate trust and wealth management have continued their strong performance trajectory and asset management has delivered growth in AUM,” Perpetual said.
The firm added that it is continuing to progress and finalise the current internal separation program to establish each of Perpetual’s businesses as discrete, independent businesses, with more accountability, which it continues to believe is in the best interests of shareholders.
“Should the transaction not proceed, Perpetual’s shareholders would continue to benefit from the financial stability and diversification provided by the group’s three strong businesses, as well as significant cost reduction opportunities across the group that align with its recently announced simplification program for the business,” it said.
Perpetual’s $2.1 billion sale of its corporate trust and wealth management businesses to KKR has faced shareholder scrutiny for months, with analysts questioning the deal’s long-term value.
Perpetual’s share price dropped from $22.3 in May to $18.5 by the end of September following the announcement of its deal with KKR, leading analysts to question contingency plans in case the transaction fails.
Its share price bounced in the months since, reaching $22.1 at the start of December, before coming down again on Tuesday on the back of the latest setback.
