Citi raises PT on Australia's Perpetual, sees takeover upside despite accelerating outflows
BUZZ-Citi raises PT on Australia's Perpetual, sees takeover upside despite accelerating outflows ** Citi raises target price on Australia's Perpetual PPT.AX to A$19.00 per share, saying the prospect of a higher bid from private equity firm EQT EQTAB.ST and continued progress on costs and deleveraging offset weaker-than-expected funds flow performance
** The brokerage retains "neutral" rating on the fund manager
** Perpetual's core net outflows excluding cash accelerated to A$8.2 billion ($5.70 billion) in Q4 from A$4.9 billion in the prior quarter, with withdrawals broad-based across the asset management division, Citi said
** Broker also notes further deterioration in investment performance
** Despite weaker flows, Citi highlights Perpetual's decision to provide EQT with limited non-public information after rejecting its A$22.50-per-share takeover proposal
** Move could support higher offer price above A$22.50 per share, Citi said, although it cautioned there is no guarantee a binding bid will emerge
** Four of five analysts rate the stock "buy" or higher, one "hold"; their median PT is A$19.50, according to data compiled by LSEG
** Stock up 6% this year, as of last close
($1 = 1.4391 Australian dollars)
(Reporting by Roshan Thomas in Bengaluru)