Platinum in predicament after Regal walks away
Analysts have accused the fund manager and its advisors of mishandling deal talks after a potential acquirer walked away. Now it must stop the bleeding — or face a fire sale.
Only a few weeks ago, struggling fund manager Platinum Asset Management looked to have worked its way into a decent negotiating position with multiple suitors circling its business. Now market observers are accusing the storied global equities house and its advisors at Jefferies of mishandling the situation, after its most likely acquirer Phil King's Regal Partners abandoned deal talks just as fund outflows deepen.
On Friday afternoon Platinum revealed funds under management had shrunk by $1.2 billion in November to hit a new low of $10.9 billion. Subsequently on Monday morning Regal revealed it was walking away from talks over a potential acquisition.
That triggered a 14% slide in Platinum's share price, sinking the stock to record lows, shaving almost $90 million from its market cap and weakening its negotiating power in any future discussions.
"Waiting for higher bidders has backfired and I can’t see how all shareholders would be happy with this situation," Bell Potter analyst Marcus Bernard told Capital Brief.
