Perpetual Halts $1.4 Billion Deal with KKR on Wealth, Trust Units Sale

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Perpetual Ltd. has ended negotiations with KKR regarding the A$2.2 billion ($1.4 billion) sale of its wealth management and corporate trust units, opting instead to pursue a separate sale of its wealth management business. Following the announcement, Perpetual’s shares dropped 3.5%, underperforming the broader S&P/ASX200 index, which was down 0.2%.

The deal, first proposed in May of the previous year, was rejected by an independent expert as not being in the best interests of Perpetual’s shareholders. KKR declined to comment on the termination of talks.

In a statement, Perpetual confirmed that its board had decided that the terms and value of KKR’s revised proposals, including various conditions, did not align with shareholder interests, leading to the end of discussions. Perpetual emphasized its intention to continue pursuing the sale of its wealth management division.

The company also revealed a dispute over a A$21 million break fee associated with the failed deal, stating it would not pay that amount. KKR has indicated it may seek additional damages.

The discussions with KKR had been on hold for the past two months after Perpetual received a surprise tax bill. Last week, KKR submitted a revised proposal, though the bid amount was not disclosed. Local reports indicated KKR had offered A$8 per share.

Perpetual also noted that the unexpected tax bill would reduce the potential cash proceeds from the sale, with the new range of A$5.74 to A$6.42 per share, down from an earlier estimated range of A$8.38 to A$9.82 per share. 

($1 = 1.5699 Australian dollars)

 

 

 

 

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