Equity Trustees extends offer but questions Trust numbers

17 September 2013

Equity Trustees (EQT) has extended its offer for The Trust Company (Trust), arguing that its offer presents the best long-term value and that figures released by Trust regarding its offer were based on incomplete information and were potentially misleading.

On Friday Trust reiterated its support for Perpetual's take-over offer, claiming that projected savings and synergies between EQT and Trust were not realistic despite the two groups not completing a mutual due diligence process. The process ended when Perpetual raised its offer, after a competing offer by IOOF, and as part of the Scheme Implementation Agreement between Trust and Perpetual.

Despite Trust's recommendation of Perpetual's offer to its shareholders, EQT stated that Trust shareholders would receive the highest long-term value from EQT as they would still retain a 62 per cent shareholding in a merged EQT/Trust group. EQT claimed that under the offer from Perpetual, Trust shareholders would only retain 7 to 13 per cent and only 5 to 10 per cent under the IOOF offer.

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EQT also claimed that the long-term value of its estimated synergies of $11 million to $15 million would add $0.42 to $1.04 more per share than Perpetual's proposal.

EQT managing director Robin Burns stated that EQT's discussion with Trust were incomplete and it was "surprised to note that Trust released some qualified estimates to the market that had never been discussed with EQT".

"As a result, Trust's estimates have not been verified by or agreed with EQT and in EQT's opinion are based on incomplete information and analysis and therefore could be potentially misleading."

However EQT stated that it considered its estimates of potential synergies as supportable based on the due diligence process.

EQT chair Tony Killen said it had extended the offer period to allow Trust shareholders to have a choice following the outcome of an ACCC investigation and possible shareholder meetings to consider the EQT proposal.

EQT's offer will now close on 29 November, but according to notices lodged with the Australian Stock Exchange it has yet to attract much interest with less than 3 per cent of shares sitting in EQT's hands.

According to the most recent Substantial Shareholder Notice lodged with the Australian Stock Exchange in early May, EQT holds 2.54 per cent of Trust shares.




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