Aussie investment firm Pinnacle hits record high on stake shopping
By Rajasik Mukherjee
Nov 21 (Reuters) -Shares of Australia's Pinnacle Investment PNI.AX surged to their highest level on Thursday after the investment company acquired A$142.8 million ($92.95 million) worth of stakes in two asset management firms based in the U.S. and London.
The stock rose as much as 4.3% to A$22.370, an all-time peak, and logged its highest intraday percentage gain since Oct. 25.
The broader ASX 200 benchmark .AXJO was trading flat as of 0024 GMT.
On Wednesday, the Sydney-headquartered company said it had signed an agreement to buy a 22.5% stake in VSS Holdings LLC — a New York-based private markets investment management firm — and a 25% stake in Pacific Asset Management, a London-based asset management platform.
The Aussie firm acquired its stake in VSS for $60.5 million while it forked out £25.75 million ($32.57 million) to earn its stake in Pacific Asset Management.
"Firm's focus on expanding its ... geographical footprint gives it a stronger organic growth profile ... and better ability to fend off competition from low-cost passive investments," Morningstar analysts said in a note.
The brokerage firm also hiked its fair value estimate to A$13.40 per share from A$12.30 apiece.
In its bid to fund the acquisition, Pinnacle undertook an A$400 million placement at an issue price of A$20.30 per share, a 5.3% discount to stock's last close of Nov. 19.
The company resumed trading on Thursday after entering into a trading halt a day earlier.
Both the acquisitions as well as the capital raising were expected to be earnings per share accretive on a pro-forma fiscal 2025 net profit after tax (NPAT) basis, the company said in a statement on Wednesday.
($1 = 1.5363 Australian dollars)
($1 = 0.7905 pounds)
Reporting by Rajasik Mukherjee in Bengaluru; editing by Alan Barona
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