By Rhiannon Hoyle


Perpetual said it's in talks with KKR about the buyout firm's planned acquisition of its corporate trust and wealth management businesses after government officials signaled that taxes associated with the deal would be higher than Perpetual envisaged.

The Australian financial company, which earlier this year agreed to sell the businesses to KKR for roughly 2.18 billion Australian dollars (US$1.40 billion), said Tuesday it now estimates taxes and duties of between A$493 million and A$529 million, citing extensive and ongoing engagement with the Australian Taxation Office. The company in August estimated those costs between A$106 million and A$227 million.

That would reduce the estimated cash proceeds to shareholders from the deal to between A$5.74 and A$6.42 a share, compared to previous guidance of between A$8.38 and A$9.82 per share.

The company said it's extremely disappointed and disagrees with the tax commissioner's views.

"Perpetual and KKR are engaging to consider the potential impact on the transaction," Perpetual said.

The Australian company said it has strong grounds to dispute the expected tax treatment of the deal, but added that the process would be protracted and that it would need to withhold sufficient funds from shareholder proceeds to cover the liability in the meantime.


Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com


(END) Dow Jones Newswires

12-09-24 1752ET