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- Praemium (PPS) knocks back a takeover bid from ASX 200-listed rival Netwealth (NWL), claiming the $785 million offer is too low
- Praemium says the unsolicited offer “undervalued Praemium’s business and is not in the best interests of Praemium shareholders”
- Under the all-scrip deal, Praemium shareholders would receive one Netwealth share for every 11.96 Praemium shares owned, effectively valuing PPS shares at $1.50 each
- Praemium said it was open to receiving other takeover proposals but any offer should “appropriately reflect Paremium’s market position” to be considered
- Shares in Praemium spike towards the offer price this morning, trading at $1.43 at midday AEDT, with Netwealth shares down 2.23 per cent to $17.12 at the same time
Fund manager Praemium (PPS) has knocked back a takeover bid from ASX 200-listed rival Netwealth (NWL), claiming the $785 million offer was too low.
Praemium said in an announcement to the ASX this morning the unsolicited offer from Netwealth “undervalues Praemium’s business and is not in the best interests of Praemium shareholders”.
Under the all-scrip deal, Praemium shareholders would receive one Netwealth share for every 11.96 Praemium shares owned, effectively valuing PPS shares at $1.50 each. This represents a 17.6 per cent premium to Praemium’s last closing price of $1.245 and values the business at $785 million.
Alas, Praemium’s board flagged several issues with the offer, which it said did not appropriately value PPS’ current performance and near-term trajectory.
Specifically, Praemium said the deal did not consider its growth trajectory or its “superior technology” that allows it to “address the broader $900 billion platform market”.
Further, Praemium claimed it was valued at a discount to its listed peers and subsequently the proposal “does reflect the significant valuation upside” to available shareholders.
Praemium also said the Netwealth offer did not reflect the contribution Praemium would make to a combined wealth advisory entity.
Today’s offer bid comes just weeks after Praemium’s recently-appointed CEO, Anthony Wamsteker, highlighted the company’s plans to bolster sales and marketing spending to compete with industry peers like Netwealth.
Praemium said it was open to receiving other takeover proposals but any offer should “appropriately reflect Paremium’s market position” to be considered.
The company has appointed Deloitte Corporate Finance and Arnold Bloch Leibler as respective corporate and legal advisers in light of the potential takeover talks.
Shares in Praemium spiked towards the offer price this morning, trading at $1.43 at midday AEDT.
At the same time, Netwealth shares were down 2.23 per cent to $17.12.
