Platinum shares sink 13% after takeover collapse overshadows special dividend

This fund manager's takeover has collapsed but a big special dividend has been declared.

Platinum Asset Management Ltd (ASX: PTM) shares are having a difficult start to the week.

In morning trade, the fund manager's shares are down 13% to 90.5 cents.

A worried man holds his head and look at his computer.

Image source: Getty Images

Why are Platinum shares sinking?

There are a couple reasons why the company's shares are in the spotlight this morning.

The first is the release of an abject funds under management (FUM) update which was released after the market close on Friday.

Platinum revealed that in November the company experienced net outflows of approximately $841 million. This figure includes the loss of an institutional mandate of $537 million and net outflows from the Platinum Trust Funds of approximately $239 million.

Funds under management were $10,957 million at the end of the month, down from $12,178 million.

What else?

The big news impacting Platinum shares today is that Regal Partners Ltd (ASX: RPL) has pulled the plug on its proposed takeover.

The two parties have been conducting an initial period of mutual due diligence which has now concluded.

According to the release, Platinum advises that discussions with Regal have ceased without a firm offer being table.

Platinum is trying to spin this as good news, stating that the takeover collapse is "removing the uncertainty that has persisted since Platinum rejected Regal's initial proposal."

Special dividend

One positive that is attempting to offset the bad news is that the company's board has determined to pay a fully franked special dividend of 20 cents per share. This is the equivalent of a 19% dividend yield based on its last close price.

Management believes that after the payment of this special dividend it will still have sufficient working capital to pursue its growth initiatives.

It also notes that the company remains fully focused on executing its restructure and turnaround strategy. Despite its FUM update covered above, it believes it has so far illustrated momentum in the areas of cost control, remuneration re-design, product rationalisation and a review of the investment process, all initiatives designed to stabilise and reset the business in order to return to a growth footing.

New partnership

Platinum also revealed that it has signed a new partnership as part of its new Platinum Partner Series. It advised:

As we move forward with the next phase of the turnaround, the investment area is a key priority. We are also focussed on managing costs in line with our funds under management, as well as product diversification and the build out of our sub advisory partnerships under our new Platinum Partner Series.

To this end, we are pleased to announce that we have secured our first partnership with GW&K, a leading US based small cap specialist with $86 billion AUD in funds under management and over 50 years of market experience. Under this arrangement, we have been appointed to exclusively distribute GW&K's global small cap strategy to the Australian retail market.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

A man dressed in a business suit freefalls from a rocky cliff with a grey sky background.
Financial Shares

Why has the AMP share price crashed 14% this week?

Find out what's happened, and what to expect next.

Read more »

Person writing notes with a piggy bank, calculator, and an ascending pile of coins on the table.
Financial Shares

This ASX finance stock is trading at an unusual discount, Shaw & Partners says

The broker is forecasting strong share price upside.

Read more »

Businesswoman working with laptop and documents in office, with virtual finance related graphs and charts.
Financial Shares

Buy, hold, sell: Magellan, NAB, and Westpac shares

Here's what the team at Morgans thinks of these popular finance stocks.

Read more »

Piles of coins with rising arrows.
Financial Shares

These 2 ASX financial shares are predicted to rise more than 40%

These companies are tipped to defy the economic headwinds and thrive.

Read more »

A smiling woman sits in a cafe reading a story on her phone about Rio Tinto and drinking a coffee with a laptop open in front of her.
Financial Shares

AMP vs Pinnacle Investment Management: ASX financial stock showdown

Weighing up AMP vs Pinnacle Investment Management shares? Here’s which ASX financial stock I’d pick with $5,000 for a 30-year-old…

Read more »

Three guys in shirts and ties give the thumbs down.
Financial Shares

Challenger earnings: Board responds to indicative offer

Challenger's board has rejected the $11.80 per share offer from TAL Daiichi Life Australia, citing the company’s value and prospects.

Read more »

Young woman reviewing financial reports at desk with multiple computer screens.
Financial Shares

Generation Development Group posts record inflows and funds under management

Generation Development Group delivered record quarterly inflows and FUM growth across its key businesses in the September 2026 update.

Read more »

A casually dressed woman at home on her couch looks at index fund charts on her laptop.
Financial Shares

Magellan Financial Group posts $778m revenue after Barrenjoey merger

Magellan Financial Group lifts revenue to $778m and pays a 25.5c dividend as its merger with Barrenjoey transforms the business.

Read more »