Pendal taps Adara Group after $2.4bn Perpetual bid

Pendal chief executive Nick Good. Picture: Britta Campion / The Australian

Australian listed funds management business Pendal Group is understood to have drafted in Adara Partners as an adviser after rebuffing a $2.4bn buyout proposal from rival Perpetual.

It is understood that Adara, a boutique corporate advisory firm chaired by Audette Exel, is working for Pendal alongside its existing adviser Macquarie Capital.

The appointment comes as Pendal prepares to deliver its half year results on Tuesday when investors are expected to face additional questions about Perpetual’s play for the business.

Pendal told shareholders on April 12 that it believed Perpetual’s cash and scrip offer of $6.23 per share based on its April 1 closing share price or $5.97 based on its April 11 price was not in the company’s best interests.

The offer that was announced on April 4 comprised 1 Perpetual share for every 7.5 Pendal shares plus $1.67 cash for each Pendal share.

Pendal shareholders would own about 48 per cent of the merged entity.

It said that Pendal’s board believed the company had some of the world’s most respected investment talent with a track record of delivering superior long term performance.

Market sources believe that more cash needed to be placed on the table from Perpetual for the offer to be compelling.

Pendal also highlighted its global presence, growth opportunities and strong balance sheet.

Pendal’s share price on Thursday closed at $5.08 and no doubt a line of questioning next Tuesday will be on the company’s strategy to boost its market performance.

Since the approach, the group’s market value has fallen to $1.94bn, and at the time, the bid was a 0.3 per cent premium to its volume-weighted average share price for 180 days before April 1.

Perpetual has been in talks with Pendal about a tie up in the past.

The group has been losing funds under management and suffering from a reduction in performance fees as some question its future strategy.