Regal rises while Platinum falls as analysts 'encouraged' by due diligence
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More news: Regal Partners' request for due diligence with takeover target Platinum Asset Management suggests the investment manager is focused on an accretive deal for its shareholders, according to E&P Capital.
Regal's shares edged 0.29% higher to $3.49 by 10:40am AEST while Platinum shares fell 0.41% to $1.20.
What they said: "We are encouraged that [Regal] has not chosen to revise its proposal without accessing due diligence for [Platinum], which suggests in our view that [Regal] are firmly focused on only progressing an accretive transaction," E&P analyst Olivier Coulon said.
"Following the rejection of the original proposal we saw potential scope for [Regal] to lift its offer and still generate an accretive transaction for its shareholders, but noted that the material cash/seed holding of [Platinum] relative to its market cap means each percentage point lift in the equity value paid by [Regal] translates to close to a 2% increase in the effective enterprise value paid for the funds management franchise."
Regal and Platinum to enter due diligence ahead of revised offer
The news: Platinum Asset Management has granted ASX investment rival Regal Partners a period of due diligence, as Regal prepares an "improved revised proposal" for its takeover target.
The context: Platinum and Regal will enter into an initial period of non-exclusive mutual due diligence to allow Regal to improve the value and terms of its proposal, after its previous offer was rejected last month.
The period of due diligence will also allow Platinum to assess the value of Regal's share consideration and the costs and benefits of any combination between the two companies.
Platinum said its board remains open to considering control proposals from Regal or other third parties, but will only progress offers if they are on terms that deliver "appropriate value" for its shareholders.
Platinum noted that there is no guarantee that discussions with Regal will progress, that Regal will submit a revised proposal, or that any new offer will be considered by Platinum.
The source: ASX announcement
