• Perpetual has terminated its Scheme of Arrangement with KKR following an unfavorable report from the Independent Expert.
• The Board has withdrawn its recommendation for the Scheme, and the Scheme Implementation Deed (SID) has been terminated with no break fee payable.
• KKR has asserted that a break fee is payable and has reserved its rights to seek further damages, but Perpetual rejects these contentions.
• Perpetual will proceed with its business separation program to establish three focused businesses.
• The company will also pursue the sale of its Wealth Management business to strengthen its capital position and support organic growth in Corporate Trust and Asset Management.
• Perpetual incurred approximately $42.6 million in transaction and separation costs, post tax, for the 12-month period to 31 December 2024, and $24.4 million, post-tax, for the six month period to 31 December 2024.
• Gregory Cooper will become the Chairman of Perpetual on completion of the 1H25 results on 27 February 2025.
• The Board is focused on reducing debt over the short to medium term.

Score: 5

Explanation: The sentiment is neutral to slightly negative. While the company is moving forward with a new strategy, the termination of the KKR deal and associated costs are setbacks. The focus on simplification and debt reduction is a positive, but uncertainty remains regarding the sale of Wealth Management and potential legal challenges from KKR.

• Perpetual has terminated its Scheme of Arrangement with KKR after the Independent Expert concluded it was not in the best interests of shareholders.
• The company will now pursue the sale of its Wealth Management business.
• Perpetual incurred $42.6 million in transaction and separation costs related to the Scheme for the 12 months ending December 31, 2024.
• Gregory Cooper will become the Chairman of Perpetual on February 27, 2025.
• The company aims to reduce debt in the short to medium term.

• Perpetual is proceeding with its business separation program to create three focused businesses.
• The sale of the Wealth Management business is expected to strengthen the Group's capital position.
• The company is focused on reducing debt over the short to medium term.
• Cost reduction initiatives are planned across the business.

• The Scheme of Arrangement with KKR has been terminated.
• KKR is asserting that a break fee is payable and has reserved its rights to seek further damages.
• Perpetual incurred $42.6 million in transaction and separation costs related to the terminated Scheme for the 12 months ending December 31, 2024.

• KKR may pursue legal action to claim a break fee and further damages.
• The sale of the Wealth Management business may not be completed on favorable terms or within the expected timeframe.
• The business separation program may encounter unforeseen challenges or delays.
• The company may face difficulties in reducing debt over the short to medium term.

Perpetual will focus on implementing a leaner, more simplified operating model with three focused businesses, reducing debt, and investing in organic growth in Corporate Trust and Asset Management.

• Bernard Reilly, Perpetual's CEO, believes the current course of action will deliver long-term value for shareholders.
• Bernard Reilly's conviction in the quality, performance, and growth opportunities across all of Perpetual's businesses has increased since he joined in September last year.
• The path forward retains earnings diversification in the near term while Perpetual works toward implementing a leaner, more simplified operating model.
• The simplified model will deliver better returns and a stronger balance sheet to support investment in growth over time.

The termination of the KKR Scheme and the pursuit of the Wealth Management sale reflect a strategic shift towards simplification and focusing on core businesses, a trend seen among other financial services firms seeking to enhance shareholder value and improve capital efficiency. Perpetual's move to separate its businesses mirrors similar restructuring efforts by competitors aiming to unlock value and streamline operations.

• Comparable companies such as AMP have also undergone significant restructuring and asset sales to simplify their business models and improve financial performance.
• The decision to sell the Wealth Management business aligns with industry trends where firms are focusing on areas of core competency and divesting non-core assets to improve capital allocation.
• The transaction and separation costs incurred by Perpetual are within the range of similar restructuring activities undertaken by other financial services companies.

• Shareholders may experience short-term uncertainty due to the terminated Scheme, but could benefit from the long-term value creation of the new strategy.
• Employees in the Wealth Management business may be affected by the planned sale.
• Customers of the Wealth Management business may experience changes as a result of the sale.
• Creditors will be impacted by the company's focus on debt reduction.

• Perpetual will continue executing on the business separation program.
• The company will pursue the sale of its Wealth Management business.
• Perpetual will announce further details on cost reduction initiatives and the balance sheet as part of the 1H25 results on 27 February 2025.
• Gregory Cooper will become the Chairman of Perpetual on 27 February 2025.

• 8 May 2024: Date of the Scheme agreed with KKR
• 10 December 2024: Announcement regarding the Scheme with KKR
• 17 December 2024: Announcement regarding the Scheme with KKR
• 31 December 2024: End of the 12-month and six-month period for transaction and separation costs reporting
• 17 February 2025: Announcement regarding the Scheme with KKR
• 24 February 2025: Date of the announcement regarding the termination of the Scheme with KKR
• 27 February 2025: Completion of 1H25 results and Gregory Cooper becoming Chairman of Perpetual