Swedish private equity firm EQT on Monday raised its takeover proposal for Australia-listed Perpetual Ltd, putting forward a third improved offer in the space of a month that values the financial services company at A$2.55 billion, or roughly $1.78 billion.
The revised non-binding cash proposal prices Perpetual at A$22.50 per share, equal to a near 19% premium to the stock's most recent close. After the announcement, Perpetual shares gained about 2.5% to A$19.40, outpacing the benchmark S&P/ASX 200, which recorded a 0.9% advance.
This latest A$22.50-per-share approach follows an A$22.07-per-share proposal submitted in mid-July and EQT's initial A$21.64-per-share offer made on July 1. On a relative basis, the newest bid is about 4% higher than EQT's opening proposal, indicating the buyout firm's willingness to increase its price after earlier approaches did not win board backing.
Perpetual reiterated that the proposal is subject to a number of conditions. Those include the completion of the company's planned sale of its wealth management business to Bain Capital, the performance of satisfactory due diligence, regulatory clearances and the negotiation and execution of definitive transaction documents.
Previous offers from EQT were rebuffed by Perpetual's board on the grounds that they undervalued the company. Perpetual has been reorganizing its business around a planned divestment of its wealth management arm to Bain Capital, leaving its corporate trust and asset management operations as the core assets at the center of the buyout interest.
Market reaction and context
Investors pushed Perpetual shares higher on the day of the announcement, reflecting a positive reception to the improved cash price. The offer remains non-binding and contingent on multiple steps before any deal could be finalized, providing potential points of friction that could affect timing and outcome.
What remains unresolved
Key outstanding items include the completion of Perpetual's planned divestiture to Bain Capital and the usual transaction processes - due diligence, regulatory approvals and definitive agreements. These steps must be satisfied before any takeover can be concluded.
The renewed proposal underlines EQT's continued pursuit of Perpetual following earlier bids that did not secure board support. How negotiations proceed will depend on the parties satisfying the stated conditions and on any further developments between the companies involved.