Private equity firm, Kohlberg Kravis Roberts & Co has offered to take over Australian asset manager Perpetual Ltd for as much as A$1.75 billion, leading to a 22-per cent jump in Perpetual's stock price in Sydney.
New York-based KKR's bid is priced between A$38 and A$40 per share, Perpetual's revealed oin a regulatory filing to the Australian stock exchange. The bid is 29 per cent more than the share's closing price on 15 October. Following the announcement Perpetual's shares shot 22 per cent in Sydney today.
According to analysts the purchase of Perpetual, which had seen its shares slump almost two-thirds from a peak in 2007, would be the first acquisition of an Austalian fund manager in a decade. The company's shares rallied under departing managing director David Deverall in an economy that skirted the recession last year.
In 2006, KKR was involved in bids for at least three companies in Australia, whose economy has been booming for at least two decades. The growth has seen the nation's A$1.35 trillion pool of managed funds more than double over the past 10 years. The government has meanwhile, proposed that employers' compulsory contributions to employee pensions be hiked to 12 per cent from 9 per cent.
''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. The Sydney-based Perpetual has appointed Goldman Sachs Group Inc. to advise it on the offer.
Perpetual saw its net income in the year to 30 June more than double to A$90.5 million, from A$37.7 million a year earlier with higher investment returns. Profit at the investment division vaulted 22 per cent in the last fiscal year, more than double the 8.8 percent gain in Australia's benchmark stock index.