The business is a diversified alternative asset manager focused on real estate, private equity, the energy transition and digital infrastructure.

One of the most useful things about a decline of a share price is that it leads to a higher dividend yield.

For example, if a business has a dividend yield of 4% and then the share price drops 10%, the yield becomes 4.4%. A 20% decline leads to a 4.8% yield, and so on.

Let's take a look at what payout and dividend yield the ASX dividend stock could deliver in FY26 and beyond.

Projected passive income

Broker UBS currently forecasts that HMC Capital could continue to deliver an annual payout of 12 cents per share in FY26, as it has done in recent years. That potential payout translates into a forecast dividend yield of 3%, or 4.4% grossed-up if the upcoming payouts are fully franked.

The ASX dividend stock is forecast to provide investors with another year of 12 cents per share in FY27, which would translate into the same yields I mentioned above.

But, the business could see higher dividends in the subsequent years, according to the projection from UBS.

The broker forecasts that the business could pay an annual dividend per share of 13 cents in FY28. That'd be a dividend yield of 3.3% and a possible grossed-up dividend yield of 4.7%, including potential franking credits.

The FY29 payout by the business could be 13 cents per share again, according to UBS. That would translate into the same dividend yields I calculated for FY28.

The best year of all for income-focused investments could be the 2030 financial year, according to the projection from UBS. That would be a possible cash dividend yield of 3.6%, or a grossed-up dividend yield of 5.1%, if it provides fully franked dividends.

Why this could be a good time to invest in the ASX dividend stock

Last week, the business announced it had established a new strategic partnership where KKR managed funds will invest up to $603 million into HMC's energy transition platform.

The investment will support the platform's continued expansion, according to HMC, including the development of new battery storage and wind projects critical to grid reliability and Australia's energy transition.

This deal will be used to repay HMC Capital debt, and the company will charge annual fees of $5 million for the provision of corporate services support. HMC's invested capital in the platform is expected to reduce by approximately $200 million.

I think this is a good step toward rebuilding investor confidence in the business.

UBS has a buy rating on the business, with a price target of $7.14, suggesting sizeable capital growth over the next year from where it is today. Explaining its buy rating on the business (which came before the KKR news), the broker said:

Our Buy rating is based on expectations that risks can be resolved and the platform can continue to grow, albeit at a more modest rate than the recent history. We now assume AUM reaches $28bn in FY29 with only $4.5bn assumed for energy transition (in contrast HMC are still targeting $50bn in 3-5yrs incl. energy transition at $5-10bn). The pushback to this view reflects a scenario where the energy transition assets take time to sell down, limiting the group's ability to execute elsewhere across the platform given capital constraints, and other fund raisings disappoint as historical missteps/risks limit the ability to raise new equity.

Earnings per share (EPS) is expected by UBS to rise from 36 cents in FY26 to 52 cents in FY30, a rise of 44%, which is a positive tailwind for both capital growth and dividend growth.

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The announcement ended months of speculation about the future of Perpetual's Corporate Trust and Wealth Management units.

With no agreement reached, the company has a new plan in place, including the sale of its wealth management arm. Let's take a closer look.

Why did Perpetual and KKR walk away?

Perpetual shares are trading lower today as investors digest the news that its deal with KKR will no longer go ahead.

Perpetual had been in talks with KKR since May last year, with a $2.2 billion deal on the table after plenty of back and forth between the two financial giants.

But the Australian Taxation Office (ATO) threw a spanner in the works in December, questioning the tax liability that would be incurred.

Both Perpetual and KKR then "engaged extensively", including a revised offer from KKR to try to get the deal through.

But even after these negotiations, no alternative deal could be reached, and the scheme has been terminated after an independent expert found it "is not in the best interests of shareholders".

Despite constructive engagement, no alternative transaction has been agreed. After thorough review and the extensive period of engagement, the Board has determined that the value and terms of those revised proposals, including the various conditions included, were not in the best interests of shareholders and discussions have now ended.

In taking these steps, the Board believes that long-term shareholder value is best achieved by retaining ownership of its high-quality businesses that have strong market positions and provide organic growth opportunities, while also leveraging the work undertaken through the Strategic Review conducted in 2024 that considered all aspects of portfolio optimisation.

Investors have reacted swiftly this morning, with Perpetual shares trading lower from the open.

What's next for Perpetual shares?

There's some contention on a "break fee" included in the contracts, which says Perpetual must pay KKR a fee associated with terminating the deal.

KKR asserts the break fee is payable, whereas Perpetual is rejecting these claims.

Perpetual has already incurred around $43 million in transaction and separation costs over the past 12 months.

This includes $24 million of associated costs in the last six months alone. There's no saying whether this will impact Perpetual shares.

Now that the KKR deal is off the table, Perpetual is proceeding with its plan to break up its businesses.

This is part of its "Strategic Review", which was carried out last year and looked at "all aspects of portfolio optimisation."

A major part of this strategy involves selling its Wealth Management unit. The division has long been a player in the Aussie market for high-net-worth advisory services and philanthropy.

Management says that proceeds from the sale would "strengthen the Group's position, as well as support investment in organic growth in both Corporate Trust and Asset Management".

No saying on what this means for Perpetual shares either at this stage.

Current CEO Bernard Reilly believes this is the "right course of action" for shareholders.

After extensive review of the options available to Perpetual shareholders, we believe this is the right course of action to deliver long-term value for our shareholders. My conviction in the quality, performance and growth opportunities across all of our businesses has only increased since I joined Perpetual in September last year.

Today's path forward retains earnings diversification in the near term while we work toward implementing a leaner, more simplified operating model with three very focused businesses that can deliver better returns and with a stronger balance sheet to support investment in growth over time.

Meanwhile, as part of this ongoing restructuring, Perpetual also confirmed a change in leadership.

Gregory Cooper will become Chairman after the company's H1 FY25 results are released, replacing current chair Tony D'Aloisio.

This transition was originally planned as part of the KKR deal but will proceed anyway.

Perpetual shares takeout

With the KKR takeover scrapped, investors now have plenty to think about with Perpetual shares.

What happens from here, only time will tell. It's all on management now.

In the last year, the stock is down nearly 10%.

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Today, the spotlight is on Perpetual Ltd (ASX: PPT) as details of its talks with Kohlberg Kravis Roberts & Co, known as KKR & Co Inc (NYSE: KKR), boil to the surface.

After much speculation, the Australian investment group revealed the outcome of its strategic review this morning.

The review, which sought to 'unlock additional value for shareholders', has yielded a few notable changes, including arguably the biggest change for the company in its more than century-long existence.

In response, the Perpetual share price is tumbling 7% to $22.35.

Historic change for 138-year-old Australian brand

At the end of Perpetual's review, the decision has been made to sell the wealth management and corporate trust businesses. The Sydney-based firm will focus solely on being a global multi-boutique asset manager.

It's a verdict that will see Perpetual depart from its 138-year-old roots. The company was originally formed as a trustee company in 1885, managing the estates of many Australians before getting started in the fund management game in the 1980s.

Asset management powerhouse KKR has agreed to acquire the businesses from the ASX 200 stock via a scheme of arrangement. Perpetual will receive a total cash consideration of A$2.175 billion in return, valuing the businesses at 13.7 times the last 12 months' earnings before interest, taxes, depreciation, and amortisation (EBITDA).

Commenting on the outcome of Perpetual's review, group chair Tony D'Aloisio said:

[…] The Board has concluded that becoming a standalone asset management business, rather than a complex diversified financial services conglomerate which is difficult for the market to value, will provide better long-term value for Perpetual shareholders.

The board unanimously recommends the proposal to shareholders, labelling it as a 'positive and compelling outcome'.

What will become of the ASX 200 stock?

Perpetual will continue to exist on the ASX if the deal goes forward — but the company will look a little different.

Management describes the remaining operations as a debt-free asset manager with scale. As shown below, Perpetual will hold $227 billion in assets under management post-sale via its brands: Perpetual, Pendal, Barrow Hanley, Trillium, etc.

However, the Perpetual brand will be owned by KKR. A licensing agreement will allow the company to continue using the label for up to seven years, although the plan is to rebrand by the end of 2025.

The deal is slated to be completed by February next year.

Lastly, another blow for the ASX 200 stock today could relate to a management change. Today's release also revealed CEO and managing director Rob Adams will retire at the end of a transition period. A global search has commenced to find a replacement.

The post Why this ASX 200 stock is making front-page news across the country appeared first on The Motley Fool Australia.

However, AMP went on to emphasise that this was a preliminary proposal. Moreover, there was no guarantee a transaction would happen at all. In fact, Ares Management, in a release to the United States Securities and Exchange Commission, echoed this sentiment: "The diligence and discussions are very preliminary and there is no certainty that any transaction will occur on the proposed terms, within any particular time frame, or at all."

Is this the best option for AMP?

Allan Gray is AMP's second largest shareholder. As reported by the Australian Financial Review (AFR), Allan Gray portfolio manager Simon Mawhinney believes that the break-up value is large: "Whatever happens I think it will be split into various parts. We are not strategic holders and would sell for the right price."

Hamish Carlisle of Merlon Capital commented: "For us it's down to which approach maximises shareholder value and that could be a buyout of all of the company, sales of the parts, or a buyback and spin-off of AMP Capital,"

Alan Kohler writes in The Australian: "AMP is going to be broken up. That was always going happen as soon as the Hayne royal commission brought down the final curtain on conflicted financial advice, although the writing was on the wall after commissions were banned in 2012."

Since the moment AMP announced a company review, there have been suitors for its AMP Capital business. Enticed further by the low AMP share price, these have included market players like Macquarie Group Ltd (ASX: MQG), US equity fund KKR & Co Inc (NYSE: KKR), DEXUS Property Group (ASX: DXS), and Vicinity Centres (ASX: VCX). Even Magellan Financial Group Ltd (ASX: MFG) was mentioned as potentially interested.

Meanwhile, the market is waiting to see if any other parties will declare a hand.

The end game

Kohler continues that there is a lot of potential if AMP can incite an auction between interested parties, indicating he believes that bids could go higher. Building on this theme, the Chanticleer column in the AFR believes that AMP has now declared a foundation for future bids. The AMP share price will be in focus over the next few weeks as this dynamic situation continues to unfold.

The post AMP (ASX:AMP) share price up another 7% on top of last week's record rally appeared first on The Motley Fool Australia.

The Australian believes the scale of the deal is $6.4 billion with an indicative share price of $1.85. 

Anatomy of the AMP takeover

Many of the chief players in this drama are part of a small circle. Ares Management has hired the ex-Credit Suisse Group (NYSE: CS) chief to run its Australian operations. Credit Suisse represents AMP along with Goldman Sachs Group Inc (NYSE: GS). Moreover, ex-CEO, now head of AMP Capital, Francesco de Ferrari, is also an ex-executive director of Credit Suisse. Additionally, The Australian has revealed that Ares Management is looking for space in Chifley Tower, near the AMP headquarters.

However, it is the final paragraph of the AMP statement that raises questions.

…AMP has received significant interest in its assets and businesses and is assessing a range of options in a considered and holistic manner, including continuing to pursue its three-year transformation strategy, with a focus on maximising shareholder value.

As the report in The Australian went on to point out, there is a chance that AMP will stay in one piece. Furthermore, the ability for it to sell off specific businesses, or embrace a total break up cannot be ruled out. While we do know that Ares Management is in the data room for due diligence purposes, we do not know if there is anybody else there. Nor do we know exactly what they are reviewing.

Since the moment AMP announced a company review, there have been suitors for its AMP Capital business. These have included market players like Macquarie Group Ltd (ASX: MQG), US equity fund KKR & Co Inc (NYSE: KKR), DEXUS Property Group (ASX: DXS), and Vicinity Centres (ASX: VCX). Even Magellan Financial Group Ltd (ASX: MFG) was mentioned as a potentially interested party.

Foolish takeaway

With the first non-binding bid now out in the open, this drama has definitely moved beyond the opening act. However, from the wording on the statement, it is clear that it is still far from over. Today, the AMP share price is trading at $1.54. Yet five years ago it was trading at $5.73 for virtually the same company, except without its life insurance business, something opposed by key institutional shareholders.

However, there has also been a lot of bad road travelled since then. The Hayne Royal Commission, underperformance, sexual harassment scandals, disarray in leadership, a revolving door on the chair position. The list goes on and has, understandably, been reflected in the falling AMP share price. While the company still may go ahead under its own steam, there is a chance that this is the final act. If so, then the board is duty bound to try to achieve the greatest value for shareholders, whether this involves a sale or breakup.

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