Trust rebuffs EQT by denying due diligence access

The board of The Trust Company has continued to support Perpetual’s takeover offer for the group, denying Equity Trustees (EQT) the due diligence access it had requested earlier this week as part of its revised offer. 

In a statement to the Australian Stock Exchange (ASX), Trust stated that after taking advice from its corporate and legal advisory teams it unanimously determined the Perpetual proposal was superior to the revised EQT offer. 

Trust maintained that Perpetual would offer higher value to shareholders, citing closing prices from 16 May that the value per share in Trust would be $6.81 - that is, 30 cents higher than the revised EQT offer. Trust also stated that much of the revised EQT offer was dependent on the future synergies being achieved, and Trust shareholders might be exposed to loss if these could not be achieved after a Trust/EQT merger. 

Trust also questioned the ability of EQT to pay a cash component as outlined in the latter’s revised offer, stating that Perpetual was more liquid than EQT “but [EQT] has provided no details as to likelihood, potential quantum or funding of this cash component”. 

As a result of these factors, Trust said “it will be easier for shareholders in Trust to realise value for their shares ¨ under the Perpetual Proposal”. The Trust board stated it would continue to unanimously recommend the Perpetual proposal ahead of a planned shareholder meeting. 

The announcement is the second endorsement of the Perpetual offer by The Trust Company, which labelled the initial EQT offer as opportunistic and endorsed the Perpetual offer to shareholders the day after it was announced to the ASX.