Perpetual Ltd: KKR offer low, but talks continue
The A$1.75-billion unsolicited offer by the Kohlberg Kravis Roberts & Co (KKR) does not reflect the real "value" of the company, listed company Perpetual Ltd. (ASX: PPT) said in today.
In a statement to the Australian Stock Exchange, Perpetual said: "Nevertheless, the board believes that shareholders' best interests are best served by conducting exploratory discussions with KKR in order to assess better the indicative proposal, which at this point remains incomplete."
Most analysts led by CitiGroup have assessed that KKR could at least increase its offer a little more.
Kohlberg Kravis Roberts & Co. offered between A$38 and A$40 per share of Perpetual.
Exiting managing director Mr David Deverall has overseen a recovery in Perpetual's earnings amidst challenging times. The company's net income ending 2009 June 30 doubled to A$90.5 million, from A$37.7 million a year
Perpetual's net income in the year to June 30 more than doubled to earlier, helped by higher investment returns. Profit at the investment division jumped 22 percent in the last fiscal year, more than twice the 8.8 percent gain in Australia's benchmark stock index.
There was, however, a period of under-performance on the stock market for Perpetual, which to analysts was the downside of it.
The company said it has yet taken this offer into account: "The Perpetual board has not formed a view with respect to the indicative proposal and recommends that shareholders take no action at this time," the company said in the statement today.
Goldman Sachs Group Inc. will advise Perpetual in this undertaking.
As of June 30, Perpetual managed more than A$27 billion in investment funds, administered A$210 billion, and advised on over A$8 billion of investments, according to its website.