Rival bidders line up for Pacific Current
Two bids have been made for Pacific Current, one from GQG Partners and the other from alternative investment manager Regal Partners.
Regal confirmed in an ASX statement on 26 July that it has provided a non-binding indicative proposal to acquire Pacific Current at an implied value of $10.77 per share. This would be implemented by scheme of arrangement for 2.2 shares in GQG Partners and $7.50 in cash per Pacific Current share.
It said the offer represents a 50 per cent premium to the 30-day volume weighted average price of Pacific Current shares and a 92 per cent premium when adjusting for the firm’s investment in GQG.
Brendan O’Connor, Regal chief executive and managing director, said: “This proposal represents a transformational growth opportunity for both Regal and Pacific Current, and one that we believe would create meaningful long-term value for both shareholders and clients.
“It represents another exciting step in our pursuit to be the leading provider of alternative investment strategies in Australia and Asia, and would capitalise on the continued growth in demand for high-performing, uncorrelated alternative investment strategies.”
Subsequently, on 27 July, investment boutique GQG Partners made its own non-binding indicative proposal to acquire all issued ordinary shares in Pacific Current. Pacific Current has a 4 per cent stake in GQG Partners.
Chief executive, Tim Carver, said: “We believe we can put forward a compelling proposal to PAC shareholders and that we will be viewed as strategically compelling to both PAC’s underlying portfolio companies and management team.
“We have a long history with PAC both as executives and by virtue of our corporate relationship.
“We have evaluated the PAC portfolio and have a strategic vision for unlocking value for PAC’s shareholders and portfolio companies.”
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.
Benefits of the transaction for Pacific Current if it proceeds, Regal said, 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 which 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,” it concluded.
The firm was formed last 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.
AUTHOR
Laura Dew
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