Breakingviews - Messy money manager merger goes from bad to worse

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Rob Adams must be wishing he could turn the clock back eight months. That’s when the boss of Australian fund management icon Perpetual was readying his first tilt for rival Pendal . Since then, despite the two sides in August agreeing to a A$2.5 billion ($1.7 billion) deal, Adams has faced his own shareholders’ scepticism, a breakup bid earlier this month for Perpetual itself, and on Monday the sudden loss of the firm’s top portfolio manager.

and private equity shop BPEA EQT offered Adams a potential way out of his unpopular pursuit of Pendal. Perpetual’s stock, which had fallen 28% since he started the chase, jumped. But last week a court decided Adams’ outfit may well have to pay more than the contractually stipulated $23 million break fee were it to ditch Pendal; investors assumed this killed the chance of Perpetual switching deals, sending the stock back down. It fell a further 2% on Monday.

Whatever lies behind Paul Skamvougeras’ decision to quit as Perpetual’s Head of Equities, losing a key executive right on the eve of a merger is awkward. And shareholders remain unconvinced the Pendal deal is a certainty as its stock trades 11% below the offer price. There’s time yet for more drama. Follow @Breakingviews on TwitterTicketmaster shares spotlight with Taylor Swift

 

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