Perpetual could face more intense resistance over its Pendal merger in the coming days, with sources suggesting that some of its star stockpickers are due to renegotiate contracts.
The talk is that the deals for the asset management team that were negotiated in 2020 are set to expire or be renegotiated soon.
Resignation threats could be made should Perpetual forge ahead with its Pendal merger plan, which would put former rival stock pickers under one roof. Sources say that in previous deals, under the leadership of former Perpetual boss Geoff Lloyd, fund managers were paid large base salaries and big guarantees. But with a changing macro environment, the terms are likely to now be less generous.
One threat is a departure to a rival firm like Challenger’s Fidante, although the thinking is that Perpetual’s management, led by Rob Adams, would likely call the fund manager’s bluff.
Perpetual declined to comment on the speculation.
Its Australian equities team is led by Paul Skamvougeras.
Vince Pezzullo is deputy head of equities, and other portfolio managers are Jack Collopy, Nathan Hughes, Anthony Aboud and James Rutledge.
After Perpetual struck a $2bn cash and scrip acquisition deal with Pendal this year, it has received two buyout offers from BPEA EQT and Australian fund manager Regal Funds Management.
Should the Pendal merger deal not go ahead, Perpetual is contracted to pay Pendal a $23m break fee.
Regal and BPEA EQT’s offers valued the company at $30 per share ($1.7bn) and $33 ($1.9bn) and were rejected as too low, with sources suggesting more than $40 per share is needed to win the board’s approval.
Some believe Mr Adams is under growing pressure to run an auction for Perpetual’s corporate trust unit, as sources suggest a number of suitors, including Challenger Financial and Partners Group, are weighing bids for the $1.9bn company.
Partners earlier offered $1.3bn for Perpetual Corporate Trust.
As part of Perpetual’s earlier agreed deal, Pendal shareholders get one Perpetual share for every 7.5 shares they own plus $1.976 of cash for each Pendal share, totalling up to $756m of cash.
The talk is that Perpetual fund managers want the company to delay or scrap the Pendal merger.
As conditions deteriorate, the target could get cheaper.
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