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Windflower, a Singapore-based entity indirectly controlled by Swedish private equity giant EQT, has upped the ante in its takeover play for financial services group Perpetual Limited (ASX: PPT) with a revised bid that values the group at $2.55 billion.
The offer of $22.07 per share is up just 2 per cent on the original $21.64-per-share bid that the board rejected as inadequate earlier this month.
While EQT states in the revised proposal that it will be "automatically withdrawn if it is disclosed", Perpetual's board has disclosed it regardless, saying it considers it "appropriate to inform Perpetual shareholders" of the approach.
“The Perpetual board is considering the revised indicative proposal with the assistance of its financial and legal advisers,” says the company.
Windflower first approached Perpetual with its unsolicited proposal on 1 July this year but Perpetual's board knocked it back within days, saying the offer was "highly conditional" and that did not "adequately represent fair value for Perpetual shareholders in the context of a change of control transaction".
The revised proposal, received and disclosed this evening after the market closed, remains non-binding and indicative.
It is subject to a string of conditions including completion of Perpetual's sale of its Wealth Management business to Bain Capital, satisfactory due diligence, regulatory approvals and the execution of binding documentation.
In March this year, Bain Capital agreed to acquire Perpetual's Wealth Management division for up to $550 million.
The takeover interest from Windflower comes as Perpetual navigates a period of strategic transition to improve shareholder returns.
“The Perpetual board remains confident in Perpetual executing its strategy, including its simplification program, the value of its diversified earnings profile (provided by the Corporate Trust and Asset Management businesses) and the execution of the sale of Wealth Management,” says the company.
The indicative offer from Windflower is now 42 per cent higher than the Perpetual share price of $15.50 ahead of the company announcing the takeover offer on 1 July this year.
Perpetual reported total assets under management of $219.2 billion at the end of March this year, down 3.6 per cent from $227.5 billion at the end of December.
Its Corporate Trust division, however, continued to grow, with funds under administration reaching $1.32 trillion.
Perpetual carried gross debt of $742 million at the end of December but expected that figure to decrease by about 15 per cent by the end of June this year.
The company has also been active on the deal front, led by an agreement struck in June to acquire a 70 per cent stake in Interfi Systems, a loan servicing technology platform with $55 billion in assets under administration.
Perpetual's board sees the Interfi investment as a strategic play to deepen its Corporate Trust capabilities.
Both the original and revised Windflower proposals are conditional on the completion of the Bain Capital transaction, meaning any deal will effectively target Perpetual's remaining operations - principally its asset management and corporate trust businesses - after the Wealth Management arm is separated.
Perpetual says it will make a further announcement once the board has completed its assessment of the revised proposal.
Shares in Perpetual today closed $18.91, well below the Windflower offer price.
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