Equity Trustees revises Trust offer for second time

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Equity Trustees (EQT) has increased its offer for The Trust Company, dropping its requirement for due diligence access and instead relying on Perpetual’s figures about potential synergies in a merged entity. 

EQT initially offered 33 shares for every 100 Trust shares, but increased that to 37 shares in May and will now also offer to pay Trust shareholders 22 cents as a special dividend, matching Perpetual’s special dividend offer. 

This second, revised offer comes after Trust rejected an approach by EQT to conduct due diligence, with the latter now stating it will not pursue this as a condition of improving its offer.  

In a release to the Australian Stock Exchange, EQT said it was reassured by Perpetual’s informed view that at least $15 million of synergy benefits were achievable and on this basis it had a superior offer for Trust shareholders than that of Perpetual. 

EQT stated that based on the respective share prices and offer ratios, combined with the special dividend of 22 cent and franking credits on the dividend, its offer lagged that of Perpetual by 13 cents at $6.00. 

However, adding the synergies of between $11 million and $15 million combined with a larger stake in the EQT-Trust merged entity for Trust shareholders, the capitalised value for Trust shareholders would range from $61 million to $84 million, well above Perpetual’s figure of $20 million.

EQT claimed that, based on this, it would be able to offer a future value of between $7.79 and $8.84 to Trust shareholders compared with Perpetual’s offer of $6.70. 

EQT chair Tony Killen said the improved offer was aimed at long-term shareholders in the trustee industry who seek long-term outcomes driven by capital growth and increased dividends - and was better suited to produce these compared with rival suitor Perpetual. 

“Our improved offer is materially superior for Trust Company shareholders seeking growth in future shareholder returns rather than seeking to cash out now,” Killen said. 

“The EQT offer provides the prospect of materially better future returns with a lower risk profile than the Perpetual offer, which is more exposed to equity market movements through its large funds management business.” 

EQT restated its view, which is has also passed on to the Australian Competition and Consumer Commission, that Perpertual’s merger with Trust would lessen competition in the trustee company sector, particularly as the latter also held 13 per cent of EQT.




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