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  • Perpetual (PPT) has requested an immediate trading halt pending an upcoming capital raise
  • The investment group intends to raise up to $265 million through a placement and share purchase plan
  • The company will remain in the halt until the earlier of July 28 or when the announcement is made
  • Through a $225 million placement, Perpetual will issue 7.4 million fully paid ordinary shares at $30.30 per share
  • Additionally, it will launch a share purchase plan to raise a further $40 million
  • Perpetual will use the money to partially fund its 75 per cent acquisition of Barrow Hanley
  • Finally, the company expects a statutory net profit of $82 million and an underlying net profit after tax of $93.5 million for FY20
  • Shares in Perpetual last traded for $33.61 each on July 24

Perpetual (PPT) has requested an immediate trading halt pending an upcoming capital raise.

The investment group intends to raise up to $265 million through a placement and share purchase plan and will use the funds for the acquisition of Barrow Hanley.

The company will remain in the halt until the earlier of July 28 or when the announcement is made.

The acquisition

Perpetual has announced that it has entered an agreement with BrightSphere Investment Group (BSIG) to acquire its 75 per cent interest in investment management company Barrow Hanley for US$319 million (around A$465 million).

This purchase will be partially funded through Perpetual’s upcoming capital raising, a new debt facility, and current available cash.

The money from the capital raise that isn’t used for the acquisition will be used to provide financial flexibility and execute growth opportunities.

“This is a compelling acquisition. It provides Perpetual with world-class investment teams, diversifies our client base by sector and geography, and presents us with significant growth opportunities in the Australian market and a formidable platform to scale our business internationally,” Perpetual CEO and Managing Director Rob Adams said.

Subject to regulatory approvals, the acquisition is expected to be completed by the first half of the 2021 financial year.

Placement

Perpetual will be undertaking a fully underwritten institutional placement to raise $225 million through the issue of 7.4 million new fully paid shares.

Shares will be priced at $30.30, which represents a 9.8 per cent discount to the company’s last closing price of $33.61 on July 24, and a 9.3 per cent discount to the five-day volume-weighted average price of $33.39.

Shares are expected to settle on July 30 and begin trading on the ASX on July 31.

Approximately $205 million will be used to fund the acquisition.

Share purchase plan

Once the placement is completed, Perpetual will undertake a share purchase plan to raise up to $40 million.

Eligible shareholders will be able to subscribe for up to $30,000 worth of new shares without incurring any transaction costs.

Shares will be priced at the lower of the placement price or the five-day volume-weighted average price of Perpetual shares, less a two per cent discount.

The share purchase plan will open on August 4 and close on August 26. Shares will then be issued on September 4 and begin trading on the ASX on September 7.

FY20 results

Finally, Perpetual expects a statutory net profit of $82 million and an underlying net profit after tax of $93.5 million for FY20.

Further, subject to board approval, the FY20 dividend will be between 80 to 100 per cent of the annualised net profit after tax.

Shares in Perpetual last traded for $33.61 each on July 24.

PPT by the numbers
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