Australian (ASX) Stock Market Forum

PPT - Perpetual Limited

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Not looking good for someone who wants to board.
Almost a 45 degree ascent over 10 days. Up $2.5

Not Held

10 DAY (15 MINUTE intervals)
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Don't get the implications of this but some in the market like it. Up about a dollar now but has been up ~$1.50 intraday. Maybe a sale or spin-off of the corporate trust business are possible conclusions? Feel I've missed the boat for PPT as I wanted to get in at the bottom. Think I was irrationally put off by the high share price in that I like to buy at least a thousand of something. I failed 'The Intelligent Investor' I.Q questionnaire a while back.

Not Held

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Here is the reason for the price spike:

At around $27 it sounds low-ball to me, but it is the first pitch.

A cannier investor than me would have noted the SOL announcement of 9.9% PPT ownership on 13 November and started loading up.

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Belli said:
As posted in the SOL thread, SOL has made an offer to buy Perpetual.
Click to expand...
A substantial notice filing published on the ASX disclosed that Washington H Soul Pattinson had lifted its physical ownership of Perpetual shares from 6.66 per cent to 11.66 per cent.

The disclosure also revealed that Soul Patts had entered into an equity collar arrangement and had an economic interest in 3.77 million ordinary shares. This meant Soul Patts had a relevant interest of up to 14.99 per cent of Perpetual shares.
 
My pick for the January comp.

The Milners will come back from their Christmas break and decide its time to get to work on PPT.
 
Response to media speculation

Perpetual Limited (Perpetual, Perpetual Group or the Company) (ASX:pPT) notes weekend media speculation in regards to its Strategic Review.

Perpetual confirms it has entered into exclusive talks with Kohlberg Kravis Roberts & Co in relation to the potential acquisition of Perpetual’s Corporate Trust and Wealth Management businesses.

There is no certainty of reaching a binding agreement, or that any transaction would proceed.
Any transaction would be subject to conditions including regulatory approvals.
Exclusivity will expire on Tuesday 7th May and as previously announced, Perpetual will provide a detailed update by Wednesday 8th May 2024.

Perpetual will continue to keep the market informed in-line with its continuous disclosure obligations.

- Ends -

This announcement was approved for release by the CEO of Perpetual Limited.

i do not hold this share ( but have in the past )
 
Perpetual concludes Strategic Review

Creation of a standalone, global multi-boutique Asset Management business and separation of Corporate Trust and Wealth Management
• Perpetual to become a standalone, global multi-boutique Asset Management business with scale, diversified investment strategies, and supported by a leaner and more streamlined structure, with a strong balance sheet.
• Wealth Management and Corporate Trust businesses to be separated to unlock value for shareholders.
• Perpetual has entered into a Scheme Implementation Deed with an affiliate of Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, “KKR”) who will acquire 100% of the two businesses via a Scheme of Arrangement (Scheme), for total cash consideration of A$2.175 billion.
This represents an attractive valuation of 13.7x Last Twelve Month (LTM) EBITDA and 16.3x Last Twelve Months (LTM) EBIT1 and will realise significant value for Perpetual’s shareholders.
• The Scheme is subject to a Perpetual shareholder vote (amongst other conditions) and if implemented, Perpetual shareholders are expected to receive cash proceeds.
Proceeds will be determined post repayment of outstanding Perpetual Group debt2 as well as separation and transaction costs and including customary business-specific net debt adjustments at completion, and shareholders will retain their current ownership in a more streamlined and debt-free global Asset Management business.
• Perpetual’s Board unanimously recommends shareholders vote in favour of the Scheme subject to there being no superior proposal and an Independent Expert concluding that the Scheme is in the best interests of Perpetual shareholders.
• Completion is anticipated to occur in February 2025, subject to satisfaction of customary conditions. • Group Managing Director and CEO, Rob Adams will retire following a period of orderly transition upon Completion.
• Non-executive Director, Gregory Cooper has been appointed as Deputy Chair to assist the Board with the Asset Management business and will chair a sub-committee to recruit a new CEO of Asset Management.
1 Last twelve months as at 31 December 2023. Based on management segment reporting EBIT of $133.5million, and management segment reporting EBITDA of $158.3 million (D&A is primarily on operating leases and software intangibles).
2 Gross debt was approximately A$771 million as at 30 April 2024.

Perpetual Limited (Perpetual, Perpetual Group or the Company) (ASX:pPT) today announced the completion of an extensive Strategic Review3 , which has examined a broad range of options available to unlock additional value for shareholders including but not limited to a divestment of the Wealth Management and Corporate Trust businesses and maintaining the status as a diversified financials conglomerate.
Following a comprehensive process, the Board has determined that becoming a pure-play global Asset Management business through a demerger, combined with the separation of the Wealth Management and Corporate Trust businesses, will provide superior value for shareholders.
Upon completion of the transaction, shareholders will continue to own shares in Perpetual Limited which will be a leaner, debt-free, global, multi-boutique Asset Management firm managing A$227 4 billion in Assets Under Management, with quality investment teams, diversified investment capabilities and global distribution reach.
In addition, the Board has determined that the separation of the Wealth Management and Corporate Trust businesses represents compelling value to shareholders.
As a result, Perpetual has today entered into a binding Scheme Implementation Deed (SID) under which KKR will acquire these businesses. Under the agreement, KKR will acquire the businesses for A$2.175 billion by way of a Scheme of Arrangement (Scheme) and net proceeds will be returned to shareholders.
Proceeds will be determined after paydown of Perpetual Group debt, as well as separation and transaction costs and including customary business-specific net debt adjustments at completion5 .
The estimated cash proceeds to shareholders will be communicated to shareholders at Perpetual’s FY24 results in August 2024. The Perpetual Board agrees that a transaction with KKR represents compelling value for shareholders and is equally a strong outcome for employees, clients and other stakeholders.
KKR is a leading investment firm with a longstanding track record of investing and supporting the growth of businesses in Australia since 2006, with strong capabilities and experience in both complex carve-outs and the financial services industry.
KKR will make its investment from its private equity strategy.
Perpetual will provide transitional services to KKR for a period of 18 months post Completion with options to extend for a further 12 months. Following completion of the transaction, the Wealth Management and Corporate Trust businesses will continue to operate as standalone independent businesses, with continuity of management.
Perpetual Group Chairman, Tony D’Aloisio said, “Following a comprehensive review, which included shareholder feedback, the Board has concluded that becoming a standalone Asset Management business, rather than remaining a complex diversified financial services conglomerate which is difficult for the market to value, will provide better long-term value for Perpetual shareholders.
Shareholders will benefit from cash proceeds following the separation and acquisition by KKR of our Wealth Management and Corporate Trust businesses, while 3 Announced on 6 December 2023. 4 As at 31 March 2024.
5 Gross debt was approximately A$771 million as at 30 April 2024.

Perpetual Limited ABN 86 000 431 827 3 also retaining ownership in a more streamlined and debt-free global Asset Management business. “In assessing the options under the Review, the Board determined that a separation of Corporate Trust and Wealth Management via a Scheme of Arrangement was a superior path for our shareholders compared to other options available, delivering certainty, an attractive valuation and nearer-term returns to shareholders.
“KKR is highly reputable and has worked constructively with Perpetual management and our Board to come to an outcome that we believe is compelling for our shareholders.
“The Strategic Review was extremely thorough and considered a number of options, involving extensive engagement with several high-quality parties and potential bidders.
KKR offered both compelling value for shareholders as well as the highest degree of certainty in relation to the funding, execution and the ability to work with Perpetual to deliver a successful outcome.
These were important criteria as the Board considered and assessed options to maximise value for shareholders.” Perpetual Group CEO and Managing Director, Rob Adams said, “This is a positive outcome for our shareholders, our clients and our people.
Each business will now have the focus and capital required to continue to grow in their respective markets ensuring our clients continue to receive world-class advice and services.
In the remaining Asset Management business, our shareholders will own a simpler, more streamlined, pure-play and independent global multiboutique investment management business, with organic growth potential.
“The combination of Perpetual’s Australian Asset Management business and the acquisitions of Trillium, Barrow Hanley and Pendal, has created a high-quality global firm.
As a standalone business, it will be leaner, more agile and fully focused on enabling our highly respected investment professionals to continue to deliver strong returns to clients, whilst presenting longterm growth opportunities for our shareholders.”
Mr D’Aloisio added, “On behalf of the Board, I want to also thank our shareholders, employees, and clients for their support and patience during this important process.” Partner and Co-Head of KKR Australia, David Lang, said: “It is a privilege to be working with Perpetual on today’s transformational announcement and we thank the Board of Perpetual for their significant trust in KKR.
We have developed important relationships with the Wealth Management and the Corporate Trust management teams and will invest behind their strategic ambitions of being two independent standalone businesses.
We look forward to supporting the continued success of the Wealth Management business and the Corporate Trust business to deliver long-term benefits for their respective clients.”
Board Renewal and Leadership Changes The existing Board and Executive Team will continue in place to deliver the benefits from this transaction. To assist the Board, Non-executive Director, Gregory Cooper has been appointed as Deputy Chairman with a primary focus of assisting the Board on the Asset Management business.
Group CEO and Managing Director, Rob Adams will retire following a period of orderly transition upon Completion.

i have held PPT in the past

buying @ $23.98 in July 2011

reducing @ $26.81 in September 2012

reducing @ $34.62 in January 2013

and exiting in March 2023 @ $22.12

so here we are the market dislikes this currently down 6.2% but touched $22.20 this morning

so is there a play here ?

rival fund managers have been mostly leaking funds ( under management ) for the last three years

you might hope for a juicy special div. in about 18 months ( but 'return to shareholders ' can be rather ambiguous they might choose buy-backs

now i wonder if SOL ( i hold SOL ) is still interested either in the trimmed down PPT , the demerged arm or still willing to offer a higher bid for everything
 
Perpetual (ASX : PPT) has confirmed the breakup deal it has struck with the US private equity giant, KKR.

In a statement to the ASX on Wednesday morning, Perpetual said it had agreed to a deal with KKR & Co. for the sale of its wealth management and corporate trust units for A$2.175 billion (US$1.43 billion).

The Sydney-based company, which has more than A$200 billion in funds under management, has entered into a cash deal with KKR.

Perpetual CEO Rob Adams will retire following the deal’s completion, the company said.

Perpetual said its board unanimously recommended shareholders back the scheme in the absence of any superior proposal and noted that an independent expert had concluded that it was in their best interests.

The deal will make the company "a leaner, debt-free, global, multi-boutique asset management firm managing A$227 billion in assets under management," Perpetual said in the statement to the ASX.

.
for a bunch of masters of the universe, this doesn't seem world beating. Pendal wasn't transformational
 
Non-cash impairment

As disclosed in its quarterly updates for FY24, Perpetual Limited (Perpetual) (ASX:pPT)experienced net outflows, including in certain investment strategies managed by J O Hambro and TSW.
As a consequence of these outflows, having undertaken impairment testing,Perpetual expects to recognise a non-cash impairment charge of approximately $547 million,pre-tax, in its financial results for the full year ended 30 June 2024 (subject to completion of the audit process and Board approval).

As previously announced in its quarterly updates throughout FY24, and in the second half of FY24 in particular, some key strategies experienced greater than expected net outflows, with net outflows of A$8.0 billion for J O Hambro and A$4.0 billion for TSW.
Based on the projected earnings impact of these outflows and a resulting moderation of expectations for future flows, compared to the assumptions made at the time of the Pendal Group acquisition, a non-cash impairment charge of $417 million will be recognised against the carrying value of goodwill for J O Hambro, and $130 million for TSW.
This will impact the statutory results of the Group for the FY24 financial year.Perpetual is in compliance with its banking covenants and there is no impact on Perpetual’s current liquidity profile1.

ENDS

i do not hold this share ( but have in the past )

i did hold PDL ( 'free-carried' )

i wonder if SOL is still interested , and willing to do a scrip deal , i hold SOL and MIGHT find that attractive ( buy PPT as a side-door to extra SOL )
 

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