Perpetual has three days to respond to a proposal from IOOF, which challenges Perpetual’s Scheme Implementation Agreement (SIA) with the Trust Company.
IOOF’s managing director Christopher Kelaher thinks that IOOF’s proposal is superior to Perpetual's because it will deliver greater value and certainty to Trust shareholders.
“Trust shareholders are able to receive consideration either in cash or in IOOF shares, may receive additional franked dividends and will have an offer that is in excess of Trust’s Independent Expert’s valuation range,” he said.
Importantly, the IOOF proposal is not conditional on ACCC approval, which Perpetual is currently waiting for. ACCC raised concerns that the Perpetual bid would abolish competition within the sector.
If combined, the Trust Services division is expected to contribute 13% of underlying NPAT to IOOF’s existing trustee and estates business.
“The IOOF proposal is expected to generate synergies of at least $14 million per annum through the elimination of duplicated activities and costs, and is anticipated to be EPS accretive in the first year post acquisition,” said Kelaher.
Under the proposal, trust shareholder will receive:
Share consideration of 0.74 IOOF shares per Trust share or guaranteed minimum cash consideration; and
A special dividend of $0.22 per Trust share (“Special Dividend”) (expected to be fully franked).
The guaranteed minimum cash consideration will be the higher of $6.03 or the cash equivalent value of the IOOF Share Consideration.