Regal Partners has tapped Barrenjoey for a $586m proposal to buy Pacific Current Group, which is advised by UBS.
The target’s shares closed at $7.80 each and the offer equates to $10.77 per share, a 42 per cent premium to the Tuesday closing price of $7.78.
But Pacific Current says that its current share price does not reflect the group’s underlying value of the porfolio and its business, yet it would assess the offer.
Pacific Current Group owns 16 high performing, specialist boutiques in key strategic markets, including Australia, India, Luxembourg, the US and the United Kingdom.
Australian listed Regal is already on its register with a 12 per cent interest and the offer is being made in co-operation with River Capital, Pacific Current’s largest shareholder with more than 19 per cent.
Shareholders would secure 2.2 shares in ASX-listed global fund manager GQG Partners, which Pacific Current Group still has a 4 per cent stake in and represented about $3.62 per share at Tuesday close, plus $7.50 in cash per share.
Pacific Current said that the offer price values its holdings in Victory Park Capital entities at $4 per share.
Regal chief executive Brendan O’Connor said the proposal represented a transformational growth opportunity for both groups and would craete long term value.
It was also in line with Regal’s long-term strategic vision to be a leading global alternatives manager.
The deal would see it bring together a stable of high quality, specialist investment managers across the United Kingdom, USA, Europe, Asia and Australia.
Pacific Current shareholders have the opportunity to receive scrip, cash or a mix of both.
Regal argues that the deal would see the company benefit from its extensive network of high net worth and family office relationships, as well as its institutional-grade operating platform.
The Australian listed Regal Investment Fund shares closed at $2.64 or $538.49m based on market value.
It comes after Regal last year purchased hedge fund VGI Partners and embarked on a joint $1.7bn bid with private equity firm EQT to buy Perpetual that was rejected.
Regal Funds Management was founded in 2004 by Andrew and Philip King and manages a number of alternative investment strategies and performs investment management and investment advisory services to a number of Australian Unit Trusts and Cayman Island Companies.
Regal Partners has $5.8bn in funds under management after its VGI merger.
Pacific Current told the market that it anticipates its botique contributions for the 2023 financial year would be between $51m and $52m versus $49.9m in the 2022 financial year.
It said its net asset value at December was $9.93 per share, and if it adjusted for fair value, it would be $1.50 to $2 per share higher.
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