KKR, Co. ended talks to buy Perpetual Ltd at least $ 1.73 billion but Fail to Agree on Offerf

KKR, Co. ended talks to buy Perpetual Ltd. at least $ 1,750,000,000 (1.73 billion U.S. dollars), prompting the biggest drop in the shares of the fund manager in Australia over two years.

The parties could not agree on acceptable terms, said in separate statements today. KKR will not carry out due diligence and based in Sydney life does not expect further discussions to purchase company based in New York, perpetual, he said.

Perpetual fell 15 percent in Sydney trading erased most of the gain from the approach announced in October. KKR challenge was to block the transmission of high-investment goal, headed by the head of equities John Sevior, to avoid buying a company has exposed flaws if key workers. That is not a typical private equity investment, said Shaun Manuell in Equity Trustees Ltd.

"It really does not fit the mold," said Manuell, who helps manage $ 750 million in Australian shares in Equity Trustees in Melbourne. "They tend to seek constant flows, cash stable and improving operational efficiency. It's a model difficult for service industries."

Perpetual shares fell to $ 31.54 at 4:10 pm local time close to its biggest drop since October 2008. KKR proposal was as high as $ 40 per share. Before the approach was announced nine weeks ago, shares of Perpetual brought A $ 30.97.

It is not acceptable

Perpetua said this month they signed confidentiality agreements with KKR and gave the companies access to some data private capital. A property manager since 1888, Perpetua had said that the legal consequence of the sale of that unit was one of the issues to be resolved before a bid could be recommended to shareholders.

"The parties have agreed that KKR bid can not be made," Perpetual said in a statement. "Mutually acceptable conditions could not be developed."

For KKR, the collapse of the talks is at least the second failure since July. This month, a group including Carlyle Group and TPG Capital KKR won after bidding U.S. $ 2 billion Australian hospital operator Healthscope Ltd. KKR bid alone, people familiar with the matter said at the time.

"KKR is satisfied with the level of access and the information received," said Ian Smith, a spokesman for Adelaide-based private equity firm, in a statement. Confirmed the two companies could not reach an agreement.

The increase in foreign exchange

Perpetua on October 15 was valued at 13.6 times earnings, 29 percent below its average of 19.2 times in the last five years.

Perpetua was founded in Sydney in 1886 by a group that included Edmund Barton, who became the first Prime Minister of Australia in 1901. The company on November 30 managed more than $ 27 billion in investment funds, according to its website.

KKR was looking for an asset manager in one of Australia 1350000000000 dollars from the pension fund industry. The offer followed a rising Australian dollar parity with U.S. currency in October, bringing the cost to foreign investors buying assets of the nation.

Perpetua, who is also seeking a new chief executive, reiterated that it expects underlying earnings after tax for the six months ending December 31 from $ 35 million and $ 40 million.