Pacific Current favours GQG in takeover bid

GQG Partners Regal Partners Limited Pacific Current Group M&A

2 November 2023
| By Laura Dew |
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GQG has emerged as the superior offer in a bid to acquire Pacific Current Group (PAC) with a non-binding indicative offer of $11 per share.

In a statement to the ASX, PAC said the independent board committee (IBC) believes the GQG proposal represents an “attractive value outcome” for PAC shareholders.

GQG submitted a non-binding indicative offer (NBIO) to the PAC IBC on 8 September. This provides for $11 in cash consideration per PAC share for 100 per cent of the issued shares by way of a scheme of arrangement, following the completion of due diligence. 

This is slightly higher than the $10.77 per share proposed by rival bidder Regal Partners in an earlier proposal in July. Regal has since withdrawn its bid as it felt there was “little confidence” in the process being run. 

“Regal has been consistently disappointed with the engagement by the Pacific Current board since its initial NBIO in March 2023. Based on the banner in which Regal’s reaffirmed NBIO has been received, Regal has little confidence in the process being run,” it said at the end of September.

Although GQG has made a higher offer, GQG has stated it has been unable to achieve the support of PAC’s largest shareholder River Capital for the proposal. 

“GQG has indicated to PAC that it continues to see significant merit in a combination with PAC, and GQG continues to explore alternative transaction structures. The IBC expects to make an announcement once these discussions have been completed.”

Multi-boutique asset manager PAC has 16 boutique firms globally, including GQG Partners where it holds a 4 per cent stake. 

In GQG’s most recent quarterly results for the three months to 30 September, it said it has US$105 billion in funds under management which is down slightly from US$108 billion in July. 

The firm’s net flows for the quarter were reported at US$1.8 billion ($2.8 billion), bringing its net flows this year to date to US$8.1 billion as at 30 September 2023. This was compared to US$7.1 billion in the same period for 2022.

GQG observed a “reasonable pipeline” of client demand across the globe and its channels. 

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