Decision time for Platinum co-founder on Regal deal

Platinum co-founder and 22 per cent shareholder Kerr Nelson.

There could be a bit more to Regal’s bid for Platinum Asset Management than meets the eye.

Apparently, tensions have been building behind the scenes between Platinum’s billionaire 22 per cent shareholder, Kerr Neilson, and the board and management.

The understanding is that Mr Neilson has been keen for an exit or a party to take out the company he co-founded. But the question being asked around the market is: Was it Mr Neilson’s will to do a deal with rival Regal Partners?

Some believe that the bid may have come as somewhat of a surprise to Mr Neilson, who – although he may want to sell – would not be a keen to offload the business to industry rival Regal Partners.

It is no secret that Mr Neilson has been dissatisfied with Platinum’s strategy, and former boss Andrew Clifford departed the company in December.

Jeff Peters was bought in as managing director to turn the business around with a strategy to launch new funds and use Platinum’s brand to launch new products.

But that strategy has had its doubters, including some of Platinum’s investors based on its share price which has fallen since the start of the year.

According to the talk in the market, it’s the company rather than Mr Neilson calling the shots, despite the size of his holding.

He may have been keen to find a buyer, but perhaps Platinum’s management and board beat him to it.

Now he has a decision to make. Does he bite the bullet and go along with a buyout by Regal if a deal is approved by the board, knowing that the risk for Platinum is that its share price may fall further?

Or does he take a hardline position and opt to not sell out until another suitor turns up?

The bid is largely expected to be rejected at this price anyway, but it may be the starting point for a further negotiation.