Equity Trustees calls on Trust to consider recommending take-over offer

financial-planning/equity-trustees/trust-company/

24 July 2013
| By Jason |
image
image
expand image

Equity Trustees (EQT) has written to Trust Company (Trust) requesting full access to an independent expert's report, a reciprocal due diligence process and assurance that Trust's board considers there is a reasonable prospect that EQT may acquire Trust.

In the letter, which has been posted to the Australian Stock Exchange, EQT chair James Killen has written to Trust chair Bruce Corlett requesting full access to a report which stated EQT's take-over offer would provide lower synergies than the competing offer from Perpetual.

The report, produced by Ernst and Young as an independent expert acting for Trust, stated that the EQT's estimated synergies of $15 million were too high and were likely to be around $7.5 million, while Perpetual's estimation of $15 million was achievable.

In a statement released yesterday Trust indicated it would seek further information from EQT regarding its bid. In response Killen stated today that this would be "an unnecessary and fruitless exercise for all concerned" given that Trust was continuing to recommend an alternative bid.

Killen also stated that before EQT would engage in further discussions with Trust it would require assurance that there is "a reasonable prospect of EQT acquiring Trust" and that Trust "would consider recommending our improved offer to your shareholders".

Killen defended EQT's synergy estimates and requested full access to the Ernst and Young report so it could assess how its own assessment differed and countered that since Trust had requested due diligence access to EQT this process should be reciprocal and at the same level offered to Perpetual.

EQT had been offered mutual due diligence access by Trust in April in the event EQT made a higher offer and stated in its letter that only historical information was available, without the necessary synergy information EQT required.

At the same time EQT rejected a request by Trust for due diligence access to a number of items claiming that its recommendation of Perpetual's offer and the lack of assurances provided so far would make the provision of the information commercially imprudent to provide.

Killen asked that Trust refocus its list of due diligence requirements to those "that are material to Trust's decision making and associated shareholder consideration" and it in turn provide the same details to EQT.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 5 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 4 days ago

TOP PERFORMING FUNDS