UBS believes the conditional, non-binding proposal for Pendal Group ((PDL)) by Perpetual at $6.23/share is opportunistic given the deep valuation discount at which Pendal has been trading.
The broker believes there’s some scope for the offer to move higher and the Pendal board is unlikely to accept the current offer.
The transaction would be around 7% EPS accretive for Perpetual, according to the analyst, including $50m of pre-tax run-rate synergies. This calculation assumes the circa $600m cash component is funded via an equity raise.
The Neutral rating and $37.65 target are retained.
Sector: Diversified Financials.
Target price is $37.65.Current Price is $31.97. Difference: $5.68 – (brackets indicate current price is over target). If PPT meets the UBS target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
