PPT -7.08%: the Perpetual brand along with the company’s Wealth Management and Trustee businesses have been sold off to KKR for $2.175b in a deal confirmed today. While the price looks reasonable, worth ~$20/sh and leaving the company with an asset manager with ~$227b under management, there remains a significant number of questions for shareholders in terms of how much of that price will be realized. Firstly, the company has ~$700m in debt to deal with, and while they state the remaining business will be debt-free, we’re unsure whether this is coming out of the price or moving with the new business. The second big question is how the sale will be treated from a tax perspective with perpetual seeking CGT roll-over relief from the ATO. On a full liability situation, the deal could see $500m in tax owing.
- Overall, at face value it seems a good deal but around half of the price paid is up in the air to whether it ends up with shareholders. The company expects to complete the deal in February next year, plenty of time to distract management from focussing on the assets that will remain.
MM has PPT in the too hard basket
Add To Hit List
