Pacific Current Group, a listed Australian asset manager that takes economic interests in third-party investment managers, has become the subject of a bidding war between two industry peers.
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Challenger Limited, an Australian wealth management firm, has made a non-binding offer to acquire Pacific Current for A$2.80 per share, valuing the company at A$840 million.
The offer is a 33% premium to Pacific Current’s closing price on Friday.
Pacific Current’s board has said that it will consider the offer and will provide an update to shareholders in due course.
The other bidder for Pacific Current is Perpetual Limited, another Australian wealth management firm. Perpetual has not yet made a formal offer, but it is said to be considering a bid of around A$3 per share.
Pacific Current’s shares have been trading higher since the news of the buyout interest emerged. The shares closed on Monday at A$2.68, up 15%.
If either Challenger or Perpetual is successful in its bid, it would be the latest in a series of consolidation deals in the Australian wealth management industry. In recent years, there have been a number of mergers and acquisitions, as smaller firms have been bought by larger players.
The buyout of Pacific Current would be a significant deal for Challenger. The company would gain access to Pacific Current’s expertise in third-party investment management, as well as its portfolio of assets.
It would also be a boost for Perpetual, which is looking to expand its wealth management business. The company has been investing heavily in its digital platform, and the acquisition of Pacific Current would give it a wider range of products and services to offer its customers.
The outcome of the bidding war for Pacific Current is still uncertain. However, the interest from two major players shows that the company is seen as a valuable asset.
What does this mean for the Australian wealth management industry?
The buyout interest in Pacific Current is a sign of the consolidation that is taking place in the Australian wealth management industry. In recent years, there have been a number of mergers and acquisitions, as smaller firms have been bought by larger players.
This trend is likely to continue, as the industry faces increasing competition from digital players. The acquisition of Pacific Current would be a significant deal for Challenger or Perpetual, and it would give them a larger share of the market.
It would also be a boost for the Australian wealth management industry as a whole. The consolidation would create a larger, more efficient industry that is better able to compete with global players.
What are the implications for Pacific Current’s shareholders?
The buyout offer from Challenger is a significant premium to Pacific Current’s current share price. This means that shareholders would be likely to receive a good return on their investment if the deal goes through.
However, there are some risks associated with the deal. For example, there is no guarantee that the deal will be successful. If the deal does not go through, Pacific Current’s shares could fall back to their current level.
Overall, the buyout offer from Challenger is a positive development for Pacific Current’s shareholders. However, there are some risks associated with the deal, and shareholders should carefully consider their options before making a decision.
