Platinum Asset Management Ltd (ASX: PTM) shares are falling on Friday morning.

At the time of writing, the fund manager's shares are down almost 1% to $1.20.

Why are Platinum shares falling?

Investors have been selling the company's shares this morning after broad market weakness offset the release of another takeover update.

As readers may be aware, last week Platinum rejected a $1.10 per share takeover offer from specialist alternative investment manager Regal Partners Ltd (ASX: RPL).

The Platinum board revealed that it unanimously concluded that the terms of the Regal proposal undervalued Platinum and was not in the best interests of its shareholders.

However, it turns out that the story did not end there.

Due diligence granted

Platinum has revealed that following last week's rejection, Regal approached it with a request that it be granted due diligence in order to allow it to submit an improved revised proposal.

According to the release, following the subsequent execution of a confidentiality deed between the two parties, the Platinum board has determined that it will enter into an initial period of non-exclusive, mutual due diligence with Regal.

This will allow Regal to improve the value and terms of its proposal. It will also allow Platinum to assess the absolute and relative value of Regal share consideration and the costs and benefits of any combination.

What's next?

The release notes that the Platinum board remains open to considering control proposals for Platinum from Regal or other third parties. However, it will only progress any such proposals if they are on terms that deliver appropriate value for Platinum shareholders.

For now, those shareholders have been warned that there is no guarantee that discussions with Regal will progress, that Regal will submit a revised proposal, or that any such proposal will be on terms considered appropriate by the Board to warrant further engagement.

As a result, Platinum shareholders have been advised to take no action in relation to today's news. It will continue to update the market in accordance with its continuous disclosure obligations.

Following today's move, the Platinum share price is now down 2% over the past 12 months.

Regal Partners' shares have fared significantly better over the period. Since this time last year, the investment company's shares are up a whopping 55%.

And with Bell Potter rating its shares as a buy with a $4.75 price target, these gains may not be over for Regal Partners.