The Platinum Asset Management Ltd (ASX: PTM) share price is under the spotlight after giving a takeover update.
Platinum is one of the larger fund managers in Australia, with a focus on global shares.
Platinum takeover update
The fund manager business had rejected a takeover offer from Regal Partners Ltd (ASX: RPL) in September, which Platinum didn’t think was large enough.
After that rejection, Regal approached Platinum with a request for due diligence so that it could submit an improved revised proposal.
Following that request, the two funds management businesses signed a confidentiality deed.
The Platinum board of directors has decided that Platinum will enter into an “initial period” of non-exclusive, mutual due diligence with Regal. This period of time will allow two things.
First, it will allow Regal to improve the value and terms of its proposal, which “has been acknowledged by Regal as the basis” for the due diligence request.
Second, Platinum will assess the absolute and relative value of the Regal share offer, and the costs and benefits of a combination.
Could a deal happen?
The Platinum board said it remains open to considering control proposals for Platinum from Regal or other third parties, but will only progress any such proposals if they are “on terms that deliver appropriate value for Platinum shareholders.”
Platinum noted that shareholders should know there is “no guarantee” that discussions with Regal will progress, or that Regal will submit a revised proposal, or that a revised offer will be good enough to warrant further engagement with Regal.
Final thoughts on the Platinum share price
A deal could make sense for both sides, if it’s at the right price. But, Platinum is under no obligation to accept and Regal may not want to pay too much.
Platinum shareholders may well wish to accept a deal so that they don’t suffer any more declines. But, the Platinum leadership will need to be convinced it’s the right move. It remains to be seen whether Regal would be successful at turning the Platinum trajectory around.
For now, there are other ASX dividend shares I’d rather buy.