Regal withdraws Pacific Current bid

regal funds management Pacific Current Group GQG Partners M&A

29 September 2023
| By Rhea Nath |
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Regal Partners has withdrawn its bid to acquire Pacific Current Group, citing consistent disappointment with the engagement by the board since its initial proposal.

In an ASX announcement, it said it has “little confidence” in the process being run, though it will continue to be a substantial shareholder.

It had previously offered to acquire Pacific Current at an implied value of $10.77 per share to be implemented by way of a scheme of arrangement for 2.2 shares in ASX-listed GQG Partners plus $7.50 in cash per Pacific Current share. 

Regal’s withdrawn bid opens the field for GQG Partners, which had also put in a bid in July to acquire all issued ordinary shares in Pacific Current. Pacific Current has a 4 per cent stake in GQG Partners.

“Since the submission of an initial non-binding indicative proposal (NBIO) in March 2023, Regal received limited and high-level due diligence information from Pacific Current and reaffirmed its NBIO in mid-September. Regal notes that nothing has changed in relation to its view of value of the company. Further, Regal maintains the view that an acquisition of Pacific Current could provide strategic benefits to Regal and the underlying Pacific Current affiliates,” the firm stated.

“However, 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. 

“For these reasons alone, Regal has formally withdrawn its NBIO to acquire Pacific Current.”

ASX-listed GQG Partners has around US$100 billion in assets under management while Regal currently has $5.8 billion in funds under management, with half coming from direct high net worth and family office relationships. 

In July, Regal said the benefits of the transaction for Pacific Current, if it proceeds, include diversification into new asset classes with significant growth potential, exposure to a large asset manager with enhanced liquidity and improved access to capital markets, and expansion of new strategies and into new geographies.

Regal could also provide a distribution platform that would boost Pacific Current’s flows in Asia Pacific and allow it to leverage Regal’s history in the region.

“Regal remains excited about this opportunity and believes that this proposal conveys our continued interest and commitment to the transaction. We are ready, willing and able to complete our due diligence in an accelerated manner, and are prepared to dedicate significant human and financial resources to execute the transaction,” the firm previously stated.

Regal Partners was formed in June 2022, following the merger between VGI Partners and Regal Funds Management, and covers long/short equities, private markets and real and natural assets.

Shareholders voted overwhelmingly in support of the merger, with almost 100 per cent supporting the deal, aided by VGI executive chairman Robert Luciano, already holding majority ownership of Regal.

 

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