CBA/452 talks called off
Colonial First State (CFS) will not be renegotiating its exclusive distribution deal with 452 Capital from the position of strength it may have hoped for, following yesterday’s collapse of talks between Peter Morgan’s boutique and its parent the Commonwealth Bank of Australia (CBA).
The talks ceased because of “an inability to reach agreement on terms”, CBA said yesterday.
CBA had earlier acknowledged that its bid to buy a stake in 452 Capital was primarily motivated by a need to fence off its exclusive right over the boutique manager’s retail distribution.
When the talks were first announced, a CBA spokesperson told Money Management the bank needed to “lock in” the exclusive agreement, which gives CFS the sole right to distribute 452 products to the retail market, before it expires next February.
The boutique manager, run by former Perpetual investment head of Australian equities Peter Morgan and former Goldman Sachs director Warwick Negus, signed the deal with the bank just after its launch in 2002.
“We wanted to lock in that distribution arrangement…We would also be able to share in the revenue of 452’s retail and large institutional funds under management,” the spokesperson said at the time.
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