Perpetual shares freeze and thaw as corporate suitor circles

Something rather odd happened with Perpetual shares this morning…

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It's been a very strange start to the week for Perpetual Ltd (ASX: PPT) shares indeed. The ASX 200 asset manager ended last week's trading at $23.30 a share. But this morning, the company came out of the gate with the announcement that its shares would be suspended from trading.

Normally, trading halts last for at least a day or two. But in this case, Perpetual resumed trading after only an hour or two of being on ice. At present, the company's share price is up a happy 2.75% at $23.94 apiece.

So what on earth is going on here?

Perpetual shares bounce back amid takeover talks

Well, Perpetual has told us most of the story in an ASX filing released this morning. The company released its trading halt announcement just before market open at 9.59am. But Perpetual subsequently released a 'Response to Media Speculation' announcement at 11.05am just before its shares resumed trading. Here's some of what this filing said:

Perpetual Limited… notes weekend media speculation in regards to its Strategic Review. Perpetual confirms it has entered into exclusive talks with Kohlberg Kravis Roberts & Co in relation to the potential acquisition of Perpetual's Corporate Trust and Wealth Management businesses.

There is no certainty of reaching a binding agreement, or that any transaction would proceed.

Any transaction would be subject to conditions including regulatory approvals. Exclusivity will expire on Tuesday 7th May and as previously announced, Perpetual will provide a detailed update by Wednesday 8th May 2024.

There has indeed been recent media speculation about Perpetual's future, so investors are probably feeling chuffed that the company itself has confirmed this.

It will be interesting to see what Perpetual has to say later in the week.

But of course, this isn't the first time this company has been the subject of M&A rumours on the ASX in recent months.

Late last year, we also covered the takeover proposal for Perpetual, which was launched by ASX 200 investing house Washington H. Soul Pattinson and Co Ltd (ASX: SOL).

Soul Patts offered investors $27 per share for all of Perpetual's assets outside its Corporate Trust and Wealth Management businesses, which the company would keep in-house.

However, Perpetual was quick to reject this offer at the time. It told investors the offer "materially undervalues Perpetual and its Corporate Trust and Wealth Management businesses" and "introduces significant execution and operational risk over a protracted implementation period".

The Kohlberg Kravis Roberts proposal may presumably be a little sweeter and offer more incentives for Perpetual and its investors. But we'll have to wait and see what happens.

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended KKR and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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