Pacific Current Group scraps acquisition plans

GQG Partners Pacific Current Group Regal Partners Limited M&A

17 November 2023
| By Laura Dew |
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Pacific Current Group (PAC) has scrapped its plans to be acquired after bids with GQG Partners and Regal Partners fell through. 

The firm initially announced in July 2023 that it had received a non-binding indicative proposal from Regal to acquire the firm for $10.77 per share. 

The following day, GQG also made a bid of $11 per share, and PAC stated this was its favoured bid. PAC has a 4 per cent share in GQG already.

This led Regal to withdraw its bid in September, stating: “Regal has been consistently disappointed with the engagement by the Pacific Current board since its initial NBIO in March 2023. Based on the manner in which Regal’s reaffirmed NBIO has been received, Regal has little confidence in the process being run.”

However, while GQG was the favoured bid, it was unable to receive the support of PAC’s largest shareholder, River Capital, and River Capital made its own bid for 100 per cent of the issued shares for $10.50 per PAC share by way of scheme of arrangement. 

GQG said it was unaware of this suggestion.

“Upon inquiry, GQG confirmed it was unaware of the submission of the River Capital proposal but in any event was not prepared to provide funding on the terms proposed.” 

On 16 November, PAC issued a statement that it concluded the strategic transaction process.

“After considering other potential strategic alternatives, the PAC board has determined that the process of reviewing strategic transactions to sell PAC’s entire business has not resulted in a binding offer for PAC that can be recommended to PAC shareholders. 

“In light of this, the PAC board has determined to conclude the strategic transaction process and dissolve the independent board committee.”

However, the firm was optimistic about the prospect of subsequent M&A activity at a later date.

“Pacific Current notes that the strategic transaction process, including the GQG proposal, has highlighted the underlying value inherent in PAC’s portfolio of assets. The PAC board remains committed to maximising value for all shareholders, including the consideration of any value accretive proposals that may be presented to PAC in the future.”

Shares in PAC are up 1.3 per cent over the past year to 16 November and by 20 per cent over six months. 

Responding, a statement from GQG said: “GQG is disappointed that it was unable to conclude a strategic transaction with PAC. GQG continues to believe that the transaction contemplated by the non-binding indicative proposal would have unlocked significant value for all shareholders of PAC as part of the strategic transaction process.

“GQG continues to see substantial strategic merit in a transaction with PAC, and GQG remains open to continuing to engage with PAC in this regard.”

It acknowledged PAC’s earlier statement indicated the non-binding indicative proposal had lapsed and is no longer subject to acceptance.
 

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