OFX plunge leads a week of takeover doubt, legal risk and fund warnings

The week’s three biggest moves came from OFX (ASX:OFX), down 20.00%, Perpetual (ASX:PPT), down 14.23%, and Netwealth Group (ASX:NWL), down 9.76%. Each fall had a clear concern behind it. OFX has not signed a takeover agreement. Perpetual still faces large withdrawals from its investment business. Netwealth must defend a new legal claim linked to First Guardian investment options.

Deal uncertainty sets the pace

OFX fell from 75 cents to 61 cents after the market questioned a sharp price drop and heavy trading. The company said discussions with Equals remain active. However, the parties have not completed a formal takeover deed. They are also still discussing whether to extend their exclusive talks. Investors may have sold because the proposed cash payment is not yet certain. OFX has promised another update by 25 September.

Equity Trustees (ASX:EQT) also gave takeover investors more work to do. Its board rejected the current prices from TPG Global and BGH Capital as too low. Both bidders kept their prices after the company’s 20-cent final dividend. EQT may share private information under confidentiality agreements. That could help bidders improve their offers. No formal bid has been made, so the deal could still fail.

Legal claims and weak fund flows weigh on managers

Netwealth said two subsidiaries have been served with a class action about First Guardian investment options. The company will defend the case. It did not disclose the amount investors are seeking. Netwealth already paid about $101 million through a compensation programme completed in January. The new claim could create another cost, but the size cannot yet be measured.

Perpetual returned to a statutory profit and lifted its underlying profit by 6% to $217 million. Yet investors faced several concerns. Its asset management business lost $25.1 billion as clients withdrew money. The company also recorded a $63.5 million impairment linked to TSW, meaning it reduced the value carried for that business. The planned wealth management sale remains targeted for late 2026. The shares also had a price gap, reopening at $18.19 before moving a further 7.59% lower.

Income helps, but accounting gains need care

Washington H. Soul Pattinson (ASX:SOL) produced a record $2.191 billion statutory profit after its Brickworks merger. Much of that result came from accounting gains that will not repeat. More useful cash measures improved too. Cash flow from investments rose 11.5% to $571.5 million. Post-tax net asset value reached $14.5 billion. The final dividend rose 6.8% to 63 cents, fully franked, meaning shareholders also receive Australian tax credits.

Several investment companies reported stronger income or returns. Argo Global Listed Infrastructure (ASX:ALI) delivered a 19.2% share price return and lifted its fully franked annual dividend to 10 cents. Katana Capital (ASX:KAT) returned 17.98% before costs, compared with 2.43% for the All Ordinaries. Carlton Investments (ASX:CIN) lifted profit and dividends, but its portfolio fell 3.2% after its large EVT holding lost 22.6%.

Funds show a wide split in results

Technology and battery funds reported large profits for the year, but later price falls changed the picture. The Global X FANG+ ETF (ASX:FAN) lifted net assets to $1.606 billion, while its value fell by more than 10% after June. The Global X Battery Tech & Lithium ETF (ASX:ACD) made $348.6 million as share prices rose during the year, then reported a later fall of more than 10% in its net asset value. These results show why one annual profit figure may not describe current investor returns.

Other funds benefited from new investor money. Firetrail Australian Small Companies Fund (ASX:FSM) nearly doubled its assets to $805.9 million after applications exceeded withdrawals. Plato Global Shares Income Fund (ASX:PGI) grew assets to $340 million after a 19.89% return. By contrast, the Perennial Better Future Active ETF (ASX:IMP) will close after a $2.601 million loss and $15.375 million in redemptions. The fund’s operator said it was unlikely to reach a viable size.

Insurance and lending reports add support

Tower (ASX:TWR) renewed its catastrophe insurance programme with $970 million of cover, up from $915 million. It also increased protection for a third major event to $100 million. The expected reinsurance cost fell to 9.5% of gross written premium from 10.6%. This gives the insurer more protection if storms or other disasters cause large claims. It does not remove the risk of future losses.

N1 Holdings (ASX:N1H) more than doubled its commercial loan receivables to $239.6 million and lifted profit to $1.01 million. Funders granted waivers on some loan conditions. The company has no recognised expected credit loss provision on its property-backed loan book. That means future borrower failures could still reduce results if losses emerge.