(Reuters) – Australia’s Perpetual said on Tuesday an independent expert has opined the asset manager’s plan to sell the wealth management and corporate trust business to KKR would not serve the best interest of investors after a tax bill blowout.
The company’s A$2.2 billion ($1.40 billion) deal with the buyout giant is at risk of falling after earlier in the month receiving a much higher-than-expected tax bill, along with higher liabilities and lower shareholder returns.
This also meant the estimated cash proceeds from the deal would reduce to A$5.74 to A$6.42 apiece, from the previously expected range of A$8.38 to A$9.82 apiece.
KKR did not immediately respond to Reuters request for comment.
The sale of the businesses and the over-a-century-old Perpetual brand would have transformed the firm as a standalone fund management business while it undergoes a strategic turnaround.
“These updates make the acquisition terms less favorable to shareholders than previously anticipated. In light of these developments, we think there is a low likelihood of the transaction proceeding in its current form,” Morningstar analyst Shaun Ler said after the initial news on the tax issue.
The company and KKR are continuing constructive engagement regarding the deal, Perpetual added.
($1 = 1.5711 Australian dollars)
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