Pendal Group Limited (PDL)
BUY

PDL - Stock Update

 12 Apr 2022
Sector: Financials

Event Spotlight

Pendal has been in the spotlight recently off the back of the PPT acquisition offer. Since then, there has been a large amount of different information released, these being:

  • Pendal’s board rejected Perpetual’s acquisition offer without appearing to engage. Pendal management stated a 5-point response as their reasoning, mentioning how the offer undervalues PDL.
  • The quarterly update for March 2022 was released. The update gives an indication that the results were improved from December although there was still a higher-than-expected negative mark-to-markets.
    1. March net flows were -0.7bn.
    2. Negative mark-to-markets of -$7.0bn.
    3. Closing FUA 124.9bn.
  • Pendal’s management further announced a $100m on-market buyback in a later ASX release.

The rejection of PPT’s offer, the quarterly update, and announcement of the $100m on market buyback is a large amount of news for PDL. It will possibly take some time for the market to digest the true impacts of these catalysts, so it’ll be important to follow further releases of information from PDL management moving forward.

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Company overview

Pendal (PDL) is an investment management company which focuses on portfolio management and advisory services.

Our investment thesis of PDL remains a BUY despite the cacophony of recent new information (discussed below). The $100m on-market buyback comes as a possible benefit to shareholders and potentially will act as a share-price support moving towards the 1H22 results, however this is subject to greater macroeconomic risks. Given the consistent news that continues to emerge it’s important to keep an eye out for any further potential catalysts.

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