Australia's Perpetual to snap up Pendal Group with improved $1.7 bln bid
- Perpetual sweetens cash component of deal
- Pendal board green-lights; shares up 15%
- Perpetual stock slides
Aug 25 (Reuters) - Australian fund manager Pendal Group (PDL.AX) on Thursday accepted a sweetened cash-and-stock takeover offer from larger rival Perpetual Ltd (PPT.AX) that valued the firm at A$2.51 billion ($1.74 billion).
The revised proposal - in which Perpetual has bumped up the cash portion, while maintaining the stock component - values each Pendal share at A$6.54, 31 cents higher than its April offer that was rejected by the target.
Pendal's board urged shareholders to vote for the offer.
"The Scheme has the Board's unanimous support and is strongly supported by our investment teams," Pendal Chair Deborah Page said.
Pendal shares surged nearly 15% to their highest since mid-January, while investors knocked down Perpetual's stock to a near two-year low.
Separately, Perpetual said it expected the deal to add double-digit earnings per share within a year of its closing.
Citi analysts said while that could be likely, "there would also be plenty of risks, with the track record of fund management mergers generally poor".
Perpetual also reported a 21% jump in its adjusted profit for the year on Thursday, while flagging a 4-6% growth in expenses in the 2023 financial year.
($1 = 1.4415 Australian dollars)
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