Trust delays Perpetual takeover

28 June 2013

The Trust Company has delayed its planned takeover by Perpetual as it seeks a meeting with Equity Trustees (EQT) to discuss how the latter calculated its cost synergy figures in its revised offer released last week.

EQT initially stated that cost synergies between Trust and EQT would be $8 million but revised that figure to $11 million last week, with a potential of $15 million.

In a statement to the Australian Stock Exchange, Trust said it has engaged Ernst and Young to assist with the synergy assessment exercise and has also offered Perpetual the same opportunity to show the basis for its synergy estimates, which Perpetual has stated in its offer as $15 million.

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The assessment exercise will be the first time EQT and Trust will meet to discuss EQT's takeover offer with Trust, stating it "would like to better understand the basis for Equity Trustees' revised synergy estimate as this is critical in determining the potential value of the Revised Takeover Offer".

Trust also stated that the increases in synergy quoted by EQT "occurred without any new information on The Trust Company being provided to Equity Trustees", referring to Trust not supplying EQT with due diligence access.

Trust then went on to reject EQT's statement in its revised takeover offer that EQT had been denied due diligence access. Trust stated that at the time of original takeover offer in February it offered due diligence access to all interested parties, including EQT, which "indicated that it did not want to undertake due diligence on The Trust Company, as it was comfortable with the internal analysis it had undertaken".

The statement also said that after the emergence of Perpetual's competing takeover offer in May it was able to offer due diligence access under certain restricted circumstances, but then removed this access based on legal advice and the strength of Perpetual's offer.

Trust said the synergy assessment with EQT and Perpetual would be conducted as quickly as possible and that it had yet to make any decision regarding EQT's revised takeover offer.

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