Equity Trustees returns with higher offer for Trust Co

With just two weeks to go before Trust Co shareholders vote on a rival bid, Equity Trustees has lobbed a sweetened offer.

Equity Trustees has sweetened its hostile bid for takeover target The Trust Company for the second time, in what could be a final attempt to stymie rival Perpetual.

Underdog Equity Trustees has increased its all-scrip offer from 37 shares to 39 shares in exchange for 100 Trust Co shares, which values Trust Co at about $267 million.

The latest offer is free from conditions, meaning Trust Co shareholders can accept the offer without delay.  DataRoom reported in September that EQT was considering increasing its offer by 10 to 15 per cent.

The offer comes two weeks before the deadline for Trust Co shareholders to vote on a $247 million rival bid – backed by the target’s board – from investment services giant Perpetual. The Australian Competition Consumer Commission has cleared the Perpetual bid.

Under Equity Trustees’ latest offer, it would ask two Trust Co directors to join the board.  

The deal would deliver Trust Co shareholders about 62 per cent of Equity Trustees, compared to between 8 and 13 per cent of Perpetual, depending on the cash level nominated under its rival’s takeover offer, Trust Co said in a statement.

Equity Trustees’ major shareholders are chasing the greater exposure to Trust Co afforded by scrip-only. EQT maintains it can achieve up to $15 million in pre-tax synergies each year under a takeover.

Trust Co has a shareholding of about 13 per cent in Equity Trustees.

Equity Trustees in June increased its offer from 34 shares to 37 in exchange for 100 shares in Trust Co, after kicking off the bidding war with its initial offer in February.

The disappearance of Trust – which recorded EBITDA of $16.6 million in 2012-13 – will likely mark swift consolidation in a sector that boasts only a handful of attractive targets, chief among them WHK and Shadforth Financial Group in the listed space, and Centric in the unlisted space. 

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