Non-aligned firm gets cold feet on merger

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Non-aligned wealth management firm SFG Australia announced in February that it had provided WHK with a non-binding indicative merger proposal. The Proposal was withdrawn yesterday following a trading update from WHK on 29 April.

In the update, WHK said discretionary business advisory services in larger regions and capital cities had declined for the third quarter and were forecast to remain weak for the fourth quarter. WHK had implemented initiatives to soften the impact of low advice demand, such as consolidating its business under a single Crowe Horwath brand, investing in SMSFs, a new principal remuneration model and moving towards a client-focused advisory business.

SFGA said it would consider a revised proposal once the parties were in a position to review each other’s full year FY13 performance and FY14 outlook.

The firm said it “will remain focused on its strategy of building a business around quality financial advisers and accountants, as illustrated through the acquisition of Lachlan Partners.

“SFGA remains of the view that the convergence of financial advisers and accountants will continue and that a combined SFGA and WHK would be uniquely positioned to provide enhanced services to these clients across Australia and New Zealand in the future, whilst also unlocking significant value for shareholders.”

Meanwhile, Perpetual has made a bid for The Trust Company. Perpetual has offered 0.1495 Perpetual shares for each The Trust Company share, equivalent to $6.17 per share and a special dividend of $0.22 per The Trust Company share, expected to be fully franked.

The Trust Company said it had been approached by a number of parties since the takeover offer by Equity Trustees in February. The board said it would recommend unanimously that shareholders support the proposal from Perpetual, in the absence of a superior proposal.

“A combination of Perpetual and The Trust Company not only creates significant value for shareholders of both companies but will also provide substantial benefits for clients and staff of the combined group,” said Chairman of The Trust Company, Bruce Corlett AM. “Perpetual’s fiduciary heritage and commitment to service quality will also ensure the high standards that our clients rely upon are maintained. The directors of The Trust Company have provided their unanimous support for the transaction.”

Perpetua l CEO Geoff Lloyd said, “The acquisition of The Trust Company comes at the right time for Perpetual to participate in the consolidation of the industry. We are well placed for the integration of The Trust Company following our investment in Perpetual Private’s new portfolio wrap service and the refocusing of Corporate Trust on its corporate fiduciary services, while the continued outstanding investment performance by Perpetual Investments will be further leveraged.”