Platinum falls as Regal gains after takeover bid rejected
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More news: Shares in Platinum Asset Management lowered at the start of trading on the ASX, while Regal Partners gained, after Platinum rejected a takeover bid by the rival investment manager.
Platinum shares were down 0.9% to $1.12 by 10:50am AEST. Regal shares rose 0.7% to $3.55, having gained more than 60% over the last 12 months.
On Wednesday, Bell Potter analyst Marcus Barnard noted that Regal's offer "may be the best offer that [Platinum] shareholders get".
What they said: "... the certainty of shares and the short-term upside from [Regal] is probably worth more to shareholders than a long-term and uncertain turnaround plan," Barnard said.
Platinum rejects Regal Partners takeover bid
The news: Platinum Asset Management has rejected a takeover bid from Regal Partners saying it undervalued Platinum and was not in the best interests of shareholders.
The numbers: Under the proposal, Platinum shareholders would receive 0.274 Regal shares and a fully franked special dividend of 20 cents per Platinum share, with a proposed special dividend to be paid by Platinum from its own cash reserves.
Platinum said based on the last closing price of Regal shares prior to the announcement of the offer of $3.30, the bid had an implied value of $1.10 per Platinum share.
Platinum last closed at $1.12 but over the last 12 months has plunged 14.77%.
The context: The board said its rejection considered a range of factors including its current turnaround strategy, the assessment of the absolute and relative value of the Regal share consideration being offered, the share of the merged business Platinum shareholders would hold if the transaction eventuated, and the conditional nature of the proposal.
The board noted it remained open to considering proposals for Platinum from Regal or other third parties.
The source: ASX announcement
