SYDNEY, AUSTRALIA: WAM Capital Limited (ASX: WAM) and Westoz Investment Company (ASX: WIC) have entered into a Scheme Implementation Agreement to merge the two entities.
Under the Proposed Transaction, WAM Capital will acquire 100% of the shares in Westoz that it does not currently own through a scheme of arrangement (Scheme). Under the Scheme, Westoz shareholders will receive new WAM Capital shares as consideration for their Westoz shares.
The number of WAM Capital shares to be offered for each Westoz share will be determined by a formula based on the ratio of the share price of WAM Capital to the net tangible assets (NTA) of Westoz before tax (pre-tax NTA).
Using the share price of WAM Capital and the pre-tax NTA of Westoz at 30 November 2021 as an example1, Westoz shareholders would receive 0.652 new WAM Capital shares for each Westoz share they hold under the Proposed Transaction, with an indicative market value of $1.447 per Westoz share, representing a 23.7% uplift over the closing price of Westoz on that day.
It is the intention of the WAM Capital Board of Directors to ensure that all Westoz shareholders receiving WAM Capital shares issued under the Scheme will be eligible to receive the WAM Capital FY2022 fully franked interim dividend. A condition of the Proposed Transaction is that Westoz will not pay an interim dividend and consequently the dividend target for Westoz is withdrawn.
WAM Capital has today announced a similar transaction involving Ozgrowth Limited (ASX: OZG). The Proposed Transaction is independent of that transaction and the two transactions are not inter-conditional.
The Proposed Transaction will proceed whether or not the transaction between WAM Capital and Ozgrowth Limited proceeds and vice versa.
WAM Capital Chairman Geoff Wilson AO said: “The WAM Capital Board of Directors believe the merged entity under the Scheme will provide both Westoz and WAM Capital shareholders with appealing benefits. We look forward to welcoming Westoz shareholders to the Wilson Asset Management family.”
Westoz Board of Directors believe the Proposed Transaction is in the best Interests of Westoz shareholders and intend to vote their own Westoz shares in favour of the Proposed Transaction.
Westoz Chairman Jay Hughes said: “An investment in WAM Capital through the Proposed Transaction offers our shareholders greater liquidity and a more favourable alignment between market price and underlying asset value for their holdings. WAM Capital also offers a similarly successful track record of underlying portfolio performance”.
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