ASB, PGC's Perpetual fail to agree terms on sale of ASB's financial adviser service Aegis

ASB, PGC's Perpetual fail to agree terms on sale of ASB's financial adviser service Aegis

By Gareth Vaughan

ASB says it plans to keep Aegis, its electronic administration service for financial advisers, after failing to agree sale terms with Pyne Gould Corporation (PGC) subsidiary Perpetual Group for the business.

PGC revealed that Perpetual was in "advanced exclusive" discussions with ASB Bank Ltd about the possible acquisition of Aegis in a stock exchange announcement last September. However, in a wide ranging announcement just before Christmas, PGC revealed Perpetual "would not be proceeding" with the Aegis deal.

Laurie Mellsop, head of ASB Group Investments, said ASB and Perpetual were unable to reach agreement on acceptable terms and conditions of sale within their proposed timeframe to reach a deal.

"Consequently, ASB has chosen to withdraw from any further negotiations and a sale of the Aegis business to Perpetual will now not take place. ASB is not pursuing the sale of Aegis to any other party and, as a result, Aegis has been withdrawn from sale.”

Aegis is an electronic administration service designed to hold, trade and report on investments. The service is available to selected New Zealand financial advisers.

PGC's announcement last September said Aegis had more than NZ$5 billion worth of funds under administration and an extensive client base. For Perpetual, which had been an Aegis customer since 2003, the chance to develop Aegis's business further would support Perpetual's long-term wealth management strategy.

In July 2008 ASB bought 100% of Aegis Limited, ASB Group Investments Limited, Investment Custodial Services Limited and Jacques Martin New Zealand Limited from fellow subsidiaries of the Commonwealth Bank of Australia for NZ$58 million. ASB's General Disclosure Statement for the year to June 2010 shows goodwill of NZ$38 million attributed to Aegis.

Aegis's annual report filed to the Companies Office website shows a 12% rise in June 2010 year operating income to NZ$12.495 million and a 31% rise in net profit after tax to NZ$4.094 million. Aegis paid a NZ$5 million dividend, representing NZ$2.50 per share, to ASB last July.

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