As a separate note, the Net Asset Value (NAV) of PAC's boutiques...

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lost

2,790 Posts.

1129

16/03/24

14:45

Post #: 72920661
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Originally posted by lost: ↑

Hi @Chrislechat

A number of thoughts on this. Here are some and will put spreadsheet down below:
1. If it isn't obvious to all by now, PAC management are in liquidation mode (long term directors leaving is another sign). More sales to follow, hopefully not Victory Park, ROC or Pennybacker as yet. These are key boutiques to hold long term.
2. The sale to GQG is at a loss of $AUD44.4M compared to purchase price, but it is perfect timing to reduce the gains made on GQG.
3. Detail of the sale agreement is critical. The only thing I believe is important is the GQG sale passes on deferred liability of $USD13M for Avante Capital (due September 2024). If liability taken on through the sale process, then this will adjust cash proceeds from GQG sale.
4. I think PAC Management should throw in Nereus Capital just to realise the loss. This would increase tax credit by about $USD8M.
5. The ongoing cost savings are very good. US distribution team dead weight. Proven in that GQG will not take this team on - GQG taking 7 key personnel only.
6. Net Assets = $13.66 (assumes fair value estimate is correct for boutiques excluding VPC, ROC and PennyBacker)

This is the value assumptions and sale price:

Net Asset Position of $13.63 per share:

Here are the notes:

I have updated the GQG gain cash position after reading through US Capital Gains rules. From previous post I didn't realise US Gains could use inflation to adjust down the gain (reduces gain by $40M). Calc's as follows:

Feedback would be much appreciated.

Best of Luck
Lost

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As a separate note, the Net Asset Value (NAV) of PAC's boutiques is $13.63 above.

This is the highest valuation based on the Group A of boutiques above. There is a risk that this will not be realised based on a lack of growth or opportunity to sell some of the boutiques.

The worst case scenario for these boutiques is a sale price of $AUD100M - this reduces above down from $AUD199M or lower by $AUD99M. Round up to reduce NAV by $2.

Revise down NAV to $11.63. A bit higher than takeover offers.

Note: This does not take into account expected increase of VPC and PennyBacker.

Last edited by lost: 16/03/24

PAC Price at posting: $9.42 Sentiment: Buy Disclosure: Held
4 Upvote

3 Great analysis

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