Regal lobs $555m bid for boutique global investment firm backer Pacific Current Group

Regal lobs $555m bid for boutique global investment firm backer Pacific Current Group

Regal Partners chief executive officer and managing director, Brendan O’Connor.

Sydney-headquartered alternatives investment manager Regal Partners (ASX: RPL) has offered a 38 per cent premium to get it hands on the Melbourne-based backer of numerous boutique global investment firms, Pacific Current Group (ASX: PAC), for more than $555 million.

Founded and led by its chief investment officer Paul Greenwood in Washington State in the US but listed in Australia, Pacific Current Group has a portfolio of stakes in 16 investment firms across the US, Europe, India and Australia.

The local inclusion in Pacific Current's portfolio is Roc Partners, which has invested in more than 100 primary funds and more than 100 co-investments across the Asia Pacific region.

Regal Partner's non-binding indicative proposal implying a value of $10.77 per share combines a mix of cash and scrip, with the cash component of $7.50 per share being just shy of PAC's last trading price.

The remainder of the offer includes 2.2 shares in ASX-listed GQG Partners Inc (ASX: GQG) - a Florida-based firm that is already in the Pacific Current portfolio - for every PAC share. Alternatively, PAC shareholders could choose to receive some or all of the consideration in Regal Partners shares.

"This proposal represents a transformational growth opportunity for both Regal and Pacific Current and one that we believe would create meaningful long-term value for both shareholders and clients," says Regal chief executive officer and managing director, Brendan O’Connor.

"A transaction would combine the scale, operational expertise and fundraising networks of Regal with Pacific Current’s highly attractive and globally diverse portfolio of ‘GP stakes’ in leading alternative asset managers."

O'Connor describes the proposal as "highly compelling" for both companies' shareholders, boutiques, clients and staff.

"It represents another exciting step in our pursuit to be the leading provider of alternative investment strategies in Australia and Asia, and would capitalise on the continued growth in demand for high-performing, uncorrelated alternative investment strategies," he says.

Regarding the finances needed to make the deal happen, Regal has entered into a co-operation agreement with River Capital - a significant existing Pacific Current shareholder - to pursue funding support for the proposal.

The proposal is subject to a number of conditions, including satisfactory completion of due diligence, the execution of binding transaction documents and approval by the boards of both Regal and Pacific Current.

Pacific Current's independent board committee will evaluate the proposal and other alternatives, and has appointed UBS Securities Australia Limited as its financial advisor in relation to the process.

The target company emphasises it has regularly communicated its view that that the current PAC share price does not reflect the underlying value of the PAC portfolio and its business.

"The Pacific Current board recently formed an independent board committee, which included putting in place a conflict management protocol, for the purpose of identifying and executing on options to realise the underlying value of the business for shareholders. This step also reflected inbound interest in PAC," the company said in a release to the ASX this morning.

PAC anticipates FY23 boutique contributions will be between $50 million and $51 million, versus $45.9 million in FY22.

As at 31 December 2022, PAC claims its statutory net asset value (NAV) was $9.93 per share.

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Golden handshakes to departing ASX100 CEOs hit 12-year high

Golden handshakes to departing ASX100 CEOs hit 12-year high

Around one in every six CEOs of ASX100 companies left their job&nbs...

Maggie Beer Holdings CEO Kinda Grange resigns just 16 months into the job

Maggie Beer Holdings CEO Kinda Grange resigns just 16 months into the job

The revolving door of leadership at Maggie Beer Holdings (ASX: MBH)...

Dreamworld owner reports improved ticket sales despite severe peak season storms

Dreamworld owner reports improved ticket sales despite severe peak season storms

The owner of Gold Coast theme parks Dreamworld and WhiteWater World...

PMFresh bags embattled salad manufacturer HS Fresh Food from administration

PMFresh bags embattled salad manufacturer HS Fresh Food from administration

Tasmania-headquartered grower and ready-made salad manufacturer&nbs...