Perenti shares up after Gresham sale

Shares in mining services company Perenti Global were up more than 6 per cent today after investment bank Gresham Partners announced an agreement to sell its $91.2 million stake.

Gresham will sell more than 48 million Perenti shares at $1.88 per share.

It acquired the shares after Perenti Global, formerly Ausdrill, purchased mining contractor Barminco, which had been controlled by Gresham.

The Barminco purchase was in exchange for 150.7 million shares along with $25.4 million cash, in a deal valued at $272 million.

The Gresham block trade, fully underwritten by JP Morgan Securities, represents the remaining Perenti shares in which Gresham has a relevant interest.

The transaction removes the uncertainty in the market regarding the Gresham overhang and follows Perenti’s strong fiscal 2019 and high share price, which surged as much as 17 per cent yesterday.

Company chief executive Mark Norwell said Perenti Global had a positive 2020 outlook.

“With our FY19 results exceeding expectations and solid FY20 guidance, on the assumption that the positive market, and global and regional conditions remain favourable, we see Perenti well positioned for FY20 and beyond,” he said.

“The conclusion of the escrow period and Gresham’s move to sell the remaining shares, post the Barminco acquisition last year, completes what has clearly been a very positive acquisition for Perenti.”

Shares in Perenti were up by 6.1 per cent to $1.99 today by the close of trade.

The increase comes just one day after Perenti announced a 68.7 underlying net profit increase to $103.1 million for the 2019 financial year.

Earlier this month, the company announced the adoption of a new brand and identity, Perenti Global, despite still being listed on the ASX as Ausdrill (ASL).