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EY has rejected a proposal by U.S. private equity group TPG to spin off the Big Four and take a stake in its advisory business, according to a statement sent to partners on Wednesday.
TPG wrote to EY in late July outlining its plans to separate its advisory arm from its audit business through a debt and equity deal. Just a few months ago, EY tried and failed to spin off its consulting business and seek an enterprise value of $100 billion in a stock market listing.
The Financial Times revealed details of the plan on Tuesday, which proposes to revive the spinoff, code-named Project Everest, in a revised form.
“We regularly receive inquiries from private equity firms and other investors expressing interest in parts of EY’s business. This has been the case with Everest before and will continue into the future,” the partners were told.
“TPG’s approach was an initial expression of interest and no further engagement has been made. We are not actively involved in any transactions. We remain focused on advancing our current FY24 priorities, completing the CEO succession process and developing the organization’s strategic path forward. ”
The move by TPG comes as EY is trying to choose a new global chairman and chief executive to replace Carmine Di Sibio. Carmine Di Sibio was the driving force behind Mount Everest, which disintegrated in April after months of infighting.
DiScipio is expected to stay on until June 2024, but it will be difficult for the company to commit to a deal until his successor is chosen. Any breakup would also need the backing of EY’s largest domestic firms, which are separately owned by partners in each country.
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