Sitting ducks and dives, post-budget CRITERION | The Australian...

Sitting ducks and dives, post-budget

CRITERION |
The Australian |
May 17, 2014 12:00AM


IOOF (IFL) $8.29 SFG Australia (SFW) 87c

YESTERDAY’S bid for financial planner SFG wasn’t a surprise given a sale process has been running for 10 months, but the bidder was vaunted to be Westpac/BT rather than IOOF.

IOOF’s gaze had been on Equity Trustees, in which it has a 12 per cent stake. But, as IOOF chief Chris Kellaher revealed yesterday, he wasn’t prepared to pay the sort of earnings multiple (25 times) on which Perpetual Trustees acquired Trust Company. With the imprimatur of SFG principal Tony Fenning, the $670 million, 90c-a-share scheme of arrangement looks done and dusted on 17 times forward earnings.

The question is, who is next in the dwindling listed advisory sector? Punters yesterday were looking no further than accounting conglomerate Crowe Horwath (CRH, 50.5c). Merger discussions between SFG and Crowe Horwath, formerly WHK Group, fell apart last year. Wilson HTM told clients yesterday to keep an eye on adviser Centrepoint Alliance (CAF, 36c), formerly Professional Investment Services (PIS). Countplus (CUP, $1.74) could come on the market, depending on controlling holder Commonwealth Bank and founder Barry Lambert.

If anything looks a sitting duck, it’s the underperforming Crowe Horwath. The hidden jewel is the firm’s regional practices, which are trusted one-stop shops for the populace.

http://www.theaustralian.com.au/business/wealth/sitting-ducks-and-dives-postbudget/story-e6frgac6-1226920563883#