A sale of Australia’s second largest dealer group is looking ever more likely after its shareholders voted to continue talks with interested parties, as well as keep their options open to pursue plans for a public listing of the group.
Professional Investment Services (PIS) shareholders, who met at the group’s annual general meeting late last week to decide the group’s future, officially decided to take a bet each way by proceeding “down a dual track process of listing and trade sale”.
But industry analysts have expressed doubt about the sincerity of the listing plans, increasing speculation the group is being set up to be sold off.
It is understood a number of groups, including the ANZ Bank, have expressed an interest in buying PIS, and are progressed in their discussions. It is believed PIS is asking in excess of $200 million for the business.
However, an analyst from Deutsche Bank — which has produced a report into the group — told Money Management he would be surprised if PIS reached the figure.
He added it was unlikely that PIS would list.
“If PIS can get $200 million from a sale, it will be one of the great sell jobs Australia has ever seen,” he said.
“I really do not think it is that good a business. I do not think the model is that sound.”
After the AGM last week, PIS managing director Graham Evans told Money Management while both a listing and a sale were still realistic options for the group, shareholders may be tempted by the high price they could get from a sale.
“From our shareholders’ perspective, the trade sale would generally provide a premium as has been seen by the Associated Planners sale, but there is the other issue of losing control of the business some where down the track,” he said.
“Our belief is that potential trade buyers are looking for the PIS model… and therefore the likelihood of us losing control would be extremely low.”
With 1,140 advisers, PIS is the second largest financial planning group in the country behind AMP, and the largest independent group.
PIS chief executive Robbie Bennetts was not available for comment as Money Management went to press last week, but in a prepared statement he said: “This is another stage in our development and evolution of the business.”
PIS has in excess of 400 shareholders, however, Bennetts himself is the main stakeholder, accounting for 14 to 15 per cent of the firm’s equity.
