In an ASX listing on Tuesday, the fund manager said: “Further to Perpetual’s announcement on 10 December 2024, the independent expert has informed Perpetual that the risk and magnitude of the increased potential tax liabilities, if the transaction were to be implemented, mean that it would not be able to form an opinion that the scheme is in the best interests of shareholders.”
“Perpetual and KKR are continuing to engage constructively in relation to the transaction. Perpetual will keep the market informed in line with its continuous disclosure obligations.”
Last week, Perpetual announced that the Australian Taxation Office (ATO) has provided its “written views” regarding the tax treatment of the transaction after what Perpetual described as “ongoing and extensive engagement”.
The revised tax liability ranges between $493 million and $529 million, a sharp increase from the previously disclosed $106 million to $227 million, the asset manager said in an ASX listing at the time.
As a result, the estimated cash proceeds to shareholders have been adjusted downward. The previously communicated range of $8.38 to $9.82 per share has been revised to $5.74 to $6.42 per share.
To contest the ATO’s position, Perpetual said it would need to withhold funds sufficient to cover the potential tax liability. The company warned that such a process would be lengthy, starting only after an ATO assessment, with no guarantee of a favourable outcome.
In October, Perpetual’s chair, Tony D’Aloisio, foreshadowed potential delays in the company’s deal with KKR, citing regulatory hurdles and tax concerns.
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.
Back in October, D’Aloisio had hinted at the possibility of sizable tax 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.
