Perpetual is expected to give some sort of update in the third week of April on the outcome of its strategic review to potentially sell its corporate trust and wealth management units.
But the delay is getting on the nerves of some of the suitors, and the talk from those inside the camp, say sources, is that the board is struggling to reach a decision.
Perpetual’s management, led by Rob Adams, has been a strong advocate of keeping all of the business together.
But if attractive offers are now on the table, unless the company can solve how it can attack its $734m debt pile, selling the unit may be the inevitable outcome.
Without a game plan of the way forward without a sale, the situation may come to a head between management and the board.
In other instances where a company’s management or board drags its feet on a strategic review or mergers-and-acquisitions outcome, institutional investors have a habit of speaking up and forcing change by threatening to call an extraordinary general meeting.
But Perpetual’s register mainly consists of retail investors, other than bidder Soul Patts which only has 11.66 per cent and not enough of a holding to force an outcome.
As earlier reported, final bids are in for Perpetual’s $1bn-plus corporate trust and wealth management units, with Kohlberg Kravis Roberts and Permira bidding for both parts.
However, Permira is now out of the race and Barrenjoey-advised EQT, bidding for corporate trust, is joining up with the Morgan Stanley-advised TA Associates, which wants its wealth management unit.
Luminis Partners is working for Perpetual’s board, while Goldman Sachs and Bank of America work for the company.
The strategic review coincided with a buyout proposal late last year from Soul Patts.
Soul Patts said at the time that its offer valued Perpetual at $3bn, or $27 a share.
Perpetual had approaches for the corporate trust business in 2022 from Partners Group and BPEA EQT.
Corporate Trust is the largest provider of corporate trustee services and transaction support in Australia.
The corporate trust unit grew revenue 3 per cent and earnings before interest, tax, depreciation and amortisation were down 1 per cent to $46.5m for the six months to December.
Healthscope firmly in the sights of Bain
Bain Capital is closing in on its next big target struggling with too much debt – the country’s second-largest hospital operator Healthscope.
Incitec Pivot’s fertiliser price likely too high for some
Potential bidders have been given information about Incitec Pivot’s fertiliser unit, but the jury’s still out as to how much they will be prepared to pay..