After rejecting its first bid, Platinum Asset Management has granted Regal Partners a period of due diligence to submit a revised bid.
Last month, Regal made an offer for Platinum which was unanimously rejected by the Platinum board who felt it undervalued the company.
The initial offer would have seen Platinum shareholders receive 0.274 Regal shares for each Platinum share held. Moreover, prior to implementation of the scheme, Platinum would be permitted to pay a fully franked special dividend to its shareholders, from its own cash reserves, of 24¢ per Platinum share.
The consideration would be reduced for Platinum’s FY24 final dividend, which was previously announced last month at 4¢ per Platinum share, and any other dividend paid by Platinum other than the permitted 24¢ per Platinum share special dividend.
Platinum responded several days later, saying: “The board of Platinum has now considered the Regal proposal, including by obtaining advice from its financial and legal advisers, and has unanimously concluded that the current terms of the Regal proposal undervalue Platinum, and, as a result, the Regal proposal is not in the best interests of Platinum shareholders. The board has therefore determined to reject the Regal proposal in its current form.”
In an ASX statement on 4 October, Platinum said it has since granted an initial period of non-exclusive, mutual due diligence with Regal.
This time will allow Regal to improve the value and terms of its proposal, which has been acknowledged by Regal as the basis for the initial engagement, and for Platinum to assess the absolute and relative value of Regal share consideration and the costs and benefits of any combination.
It noted there is no guarantee that discussions with Regal will progress or that it will submit a revised proposal.
The Platinum board said it remains open to other proposals from Regal or other third parties if they are on terms that deliver appropriate value for Platinum shareholders.
