Australia-based Pendal Group has received a non-binding takeover offer from investment manager Perpetual, which values it at A$2.4bn ($1.80bn).
Under the proposal, Pendal shareholders will receive one Perpetual share for every 7.5 Pendal shares along with A$1.67 in cash.
Based on the proposed constituents of scrip consideration, Pendal shareholders would own around 48% of the combined entity.
Pendal said it has commenced an assessment of the Perpetual’s proposal.
The firm said: “The Board is also carefully assessing the outlook for Perpetual and the proposed combined group given the significant scrip component of the proposed consideration.
“The Board will consider all of these factors to ensure it acts in the best interests of shareholders as it assesses the Indicative Proposal as well as assessing alternative opportunities for Pendal.”
The proposed acquisition is part of Perpetual’s strategy to grow its business globally and is expected to bring about A$50m of run-rate pre-tax annual cost synergies.
The company said that the merger would create a global asset manager with diversified investment strategies, enhanced ESG capabilities and a global distribution network.
It said in an announcement: “The combined group will be well placed to grow its asset management businesses across all key markets and channels, gain improved leverage and scalability across a unified business platform, delivering high quality client service, greater innovation, whilst meaningfully enhancing the growth profile of both companies.”
Goldman Sachs is acting as financial adviser and Herbert Smith Freehills as legal adviser to Perpetual on the deal.
Last year, Pendal signed a deal to buy Virginia-based value investment manager Thompson, Siegel & Walmsley in a $320m deal.