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RPL ASX: Phil King’s Regal Partners homes in on biggest M&A target to date: Platinum
Sarah Thompson, Kanika Sood, Emma Rapaport
2 - 3 minutes
Regal would be thinking hard about what price and terms Platinum’s shareholders – including Neilson, who floated the business at $5 a share 17 years ago – would be prepared to accept. Platinum has a market capitalisation of $576 million on the ASX, but has $250 million in cash and term deposits, $70.3 million in franking credits and about $20 million in co-investments – meaning its value is closer to $230 million.
Should Regal’s deliberations parlay into a deal, it would be its biggest M&A bet to date. It has grown funds under management by more than 300 per cent since it landed on the ASX after a reverse takeover of Rob Luciano’s hedge fund VGI Partners in June 2022.
King has made the best of Regal’s perky share price, picking up stakes in at least five funds management businesses over the past two years including Paul Moore’s PM Capital, Melbourne-based private credit player Merricks Capital, well-regarded specialist resources financier Taurus Funds, environmental commodities business Attunga Capital, and water rights investor Argyle. He’s also not afraid to swing hard at bigger targets and made a tilt for Pacific Current Group as well as Perpetual.
While Regal’s backers have been rewarded richly with the shares up 44.9 per cent over the past 12 months, its latest target has been in a world of pain.
Platinum, widely credited as popularising global equities investing for Australian retail investors, oversaw $26 billion in client assets in its heyday. Its share price has followed a slump in funds under management, falling 27.7 per cent over a year and 75.8 per cent over five years. It is now trading at nearly 80 per cent lower than the price it floated at.
Neilson, with a 21.48 per cent stake, last year indicated he would be open to M&A approaches. Peters was installed as chief executive in January, and has since begun a sweeping restructure of Platinum’s investment team, leading to several exits.
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