Shares of Perpetual rose to a six-month high on Thursday after the Australian financial services provider rejected an A$2.45 billion ($1.69 billion) takeover proposal from EQT AB, saying the offer undervalued the company.
Perpetual’s shares jumped as much as 7.5% to A$19.46, their highest level since early January, extending Wednesday’s 17% rally.
The stock is, however, still 10% below EQT’s offer price of A$21.64 a share. The benchmark index .AXJO traded largely unchanged as of 0505 GMT.
The Sydney-based firm turned down the offer in a filing after the closing bell on Wednesday, saying that it failed to adequately represent fair value for Perpetual shareholders in a change-of-control scenario.
“EQT will have some scope to sweeten the deal further but will also draw a hard line on where value is reasonable,” said Cameron Curko, CIO at Pitcher Partners.
EQT did not respond to a Reuters email seeking comment sent on Wednesday.
The bid highlights unrealised value in Perpetual’s shares, with earnings supported by its corporate trust business despite manageable outflow and margin risks, Morningstar equity analyst Shaun Ler said.
Perpetual earlier this year agreed to sell its wealth management arm to Bain Capital for A$500 million in upfront cash. The business had originally formed part of a A$2.18 billion deal with KKR in 2024 that was eventually called off.
The nearly 140-year-old asset manager has attracted multiple takeover approaches in recent years. It rejected a A$1.7 billion bid from a consortium that included Regal Partners RPL.AX in 2022, before turning down a A$3.1 billion offer from its largest shareholder, Washington H Soul Pattinson SOL.AX, a year later.
Since 2022, Perpetual shares have lost nearly 50% in value.
($1 = 1.4497 Australian dollars)
Reuters
