WAM Capital bids for Contango’s Income Generator
WAM Capital has announced its conditional off-market takeover bid for Contango Income Generator Limited (CIE), offering shareholders an opportunity to exit as CIE failed to provide shareholder value.
WAM said in the statement, made to the Australian Securities Exchange (ASX), that CIE shareholders suffered a persistent and deepening share price discount to NTA (net tangible assets), poor investment portfolio, an illogical change in investment strategy and an increase in fees as well as dilution of shareholder value and poor corporate governance including the CIE’s board’s failure to present Wilson Asset Management’s alternative proposal.
The offer consideration which assumed one WAM share for every three CIE shares, would represent a premium of 17.6% to CIE’s share price, 18.1% to CIE’s one-month volume-weighted average price (VWAP) and a premium to CIE’s reported pre-tax NTA, the firm said.
Also, WAM Capital said that, in making this offer, it would provide all CIE shareholders with the opportunity to exit their positions in CIE and, if the offer was successful, WAM would provide CIE shareholders with a choice to either remain a WAM shareholder or utilise WAM’s on-market liquidity to exit their position.
Acquiring WAM shares would provide access to Wilson Asset Management’s investment expertise and commitment to shareholder engagement while WAM also offered track record of investment portfolio outperformance, greater market capitalisation and on-market liquidity and lower management expense ratio, the firm said.
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