Platinum LIC at ‘crossroads’ as rivals line up to take over
The chair of the Platinum Capital (PMC) listed investment company admits the vehicle “is at a crossroads” in its 31-year history, with both L1 Capital and Wilson Asset Management bidding to take over its investment management.
Reflecting on the LIC’s future, chair Margaret Towers said the past year and associated upheaval have been “demanding” for the LIC’s board and investment team.
The LIC was first put under strategic review in April 2024, and it was subsequently decided in July that the best option would be for the LIC to enter a scheme of arrangement to merge with the open-ended Platinum International Fund Complex ETF.
But the plan hit a snag on when it was announced that L1 Capital – which had entered a binding agreement to merge with Platinum Asset Management – and its holding company First Maven were a substantial shareholder in the Platinum Capital LIC with a 16.8 per cent stake and were against the scheme.
As a result, the board of Platinum Capital LIC said it has now opted to withdraw the scheme as the lack of support from L1 means it is unlikely to reach the required 75 per cent approval threshold.
Towers said: “The company is at a crossroads in its 31-year history.”
At a planned extraordinary general meeting to be held on 3 October, PMC shareholders will vote on the appointment of three nominated directors proposed by L1 Capital and three proposed by Wilson Asset Management.
L1 Capital has nominated Rachel Grimes, Douglas Farrell and David Gray, while Wilson has nominated Geoff Wilson, Richard Caldwell and Julian Martin.
Towers and her fellow director Ian Hunter have indicated they intend to resign from the board and that the new board, if elected, would evaluate the new investment management agreement (IMA) proposals.
Both L1 Capital and Wilson have put forward non-binding indicative IMA proposals to replace Platinum and manage the portfolio in accordance with their IMA for the company.
Wilson, which made a bid on 14 August, said it would manage the trust using the same principles as it manages its WAM Global LIC with a focus on global mid, large and mega-cap companies.
“Under the new management agreement, Wilson Asset Management would manage the company’s investment portfolio using the investment strategy Wilson Asset Management employs for WAM Global Limited; including the research-driven and market-driven investment processes, with the investment strategy of the company to have a focus on mid, large and mega-cap companies in global markets.”
Platinum's second LIC Platinum Asia was successfully merged into the Platinum Asia Complex ETF in mid-August with no shareholder objection.
AUTHOR
Laura Dew
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