At the time, D’Aloisio noted the emotional and historical significance of the sale of the Perpetual brand, which has been a cornerstone of the Australian financial services landscape for 138 years.
“The price included the negotiated value for the brand,” he said, emphasizing the importance of ensuring the best outcome for shareholders and employees.
He noted, however, that regulatory approvals and discussions on taxes and customs duties could slow down the process.
“As soon as we have a clearer vision and certainty about this, we will be able to update the market,” he said.
Fast forward to Tuesday, and the picture has dimmed for shareholders. Perpetual confirmed a sharp revision to the estimated cash proceeds from the sale, reducing the range from $8.38 to $9.82 per share to a significantly lower $5.74 to $6.42 per share.
Already in October, D’Aloisio had hinted at the possibility of such adjustments, emphasizing that the previous figures were indicative and “based on the information available at the time.”
Also at the time, he wisely laid out the options available to shareholders, emphasizing that they could either support the deal or vote against it, choosing instead to retain the company’s three core businesses.
He also clarified that delays were possible, explaining that while the goal was to put the proposal to a vote by early 2025, “there are issues that are beyond our control and involve third parties, such as regulatory approvals and the finalization of discussions on taxes and duties.”
It now appears that these final discussions have reached a critical turning point.
The discussions follow concerns raised by the Australian Taxation Office (ATO) that it could significantly increase tax liabilities linked to the deal.
The revised tax liability is now between $493 million and $529 million, a sharp increase from the previously disclosed $106 million to $227 million.
The asset manager also flagged the possibility that the deal with KKR may not materialize given the revised tax bill, noting that it remains subject to the satisfaction of a number of conditions precedent.
The possibility of the deal failing had been raised earlier by former CEO Rob Adams, who said in August that the board was running contingency plans.
“It’s not the outcome we’re expecting, but we’re managing them,” he said.
To make up for the blow, Perpetual provided an update on its activities on Tuesday. Its asset management division increased its assets under management by 3 percent to $222.3 billion in the first quarter of the 2024-25 financial year. Corporate trusts increased funds under administration by 1 per cent to $1.2 trillion and funds under wealth management advice increased by 3 per cent to $20.4 billion.
“Each company continues to provide benefits to Perpetual shareholders. Since the start of the second quarter of FY25, the corporate trust and wealth management sectors have continued their strong performance trajectory and asset management has delivered growth in assets under management,” a declared Perpetual.
The company added that it continues to progress and finalize the current internal separation program to make each of Perpetual’s businesses separate, independent businesses, with greater accountability, which it believes is in the best interest of shareholders.
“If the transaction were to fail, Perpetual shareholders would continue to benefit from the financial stability and diversification offered by the group’s three strong businesses, as well as significant cost reduction opportunities within the group, which align on its recently announced business simplification program. » he said.
Perpetual’s sale of its corporate trust and wealth management businesses to KKR for $2.1 billion has been the subject of shareholder scrutiny for months, with analysts questioning the long-term value end of the operation.
Perpetual’s share price fell from $22.3 in May to $18.5 in late September following the announcement of the KKR deal, leading analysts to question contingency plans in case the transaction fails.
Its stock price rebounded in the months that followed, reaching $22.1 in early December, before falling again on Tuesday following the latest setback.
