Perpetual scoops up Pendal to double its assets under management

Asset manager Perpetual has announced a deal to acquire rival Pendal in a takeover that will see the firm more than double its assets under management to $201 billion.

The scrip and cash deal, announced as Sydney-based investment firm Perpetual announced its full-year results on Thursday morning, comes after months of talks between the two funds managers. Perpetual first launched a $2.4 billion bid in April, which Pendal’s board rejected as too low.

The acquisition agreement, which is still subject to shareholder and regulatory approval, will see Pendal investors receive one share in Perpetual for every 7.5 Pendal shares they own plus $1.976 in cash. This implies an offer price of $6.02 for each Pendal share, based on Perpetual’s last closing share price, valuing the business at $2.5 billion.

Pendal’s shares jumped 57 cents, or 11.7 per cent, to $5.45 during mid-morning trade on the ASX, while Perpetual’s shares shed 3.7 per cent to $29.18.

Perpetual CEO Rob Adams will lead the combined group, and up to three directors of Pendal (a former Westpac subsidiary) will be invited to join the board. Pendal shareholders will own about 47 per cent of the combined company.

Both businesses on Thursday welcomed their deal in statements to the ASX, saying the takeover would create a leading boutique asset manager which will be more competitive globally due to its scale and array of investment strategies.

Perpetual’s assets under management will increase from $90 billion to $201 billion.

“The combined group will have premium, respected brands domestically and globally, […] will be a global leader in active ESG [environmental, social, and corporate governance] asset management and will have a materially enlarged global distribution team to drive improved future growth,” said Adams.

Perpetual’s underlying profit after tax for the 2022 financial year was up 21 per cent to $148.2 million, which it attributed to revenue and earnings growth across its four business units.