Aurora Funds Management has announced that its Dividend Income Trust (ADIT) has announced plans to make an off-market takeover bid for Keybridge Capital (KBC) at an all cash bid price of 6.6 cents for each ordinary share.
The firm said in the announcement made to the Australian Securities Exchange (ASX) that the offer represented an 8.9% premium to KBC’s net tangible assets (NTA) and a premium of 1.5% to the take offer announced earlier by WAM Active Limited.
Following this, the bid would provide an opportunity for KBC shareholders to sell their shares off-market at a premium to KBC’s most recent NTA and WAM Active’s takeover bid.
Also, ADIT would enter into funding agreements with HHY Fund and Aurora Fortitude Absolute Return Fund (AFARF) which, if necessary, would ensure the cash requirements of the bid to be satisfied, the firm said.
According to Aurora FM, the bid would strengthen ADIT’s asset base by providing it with the potential for future capital growth.
“The increased asset base would also provide an improved ability to grow the investment portfolio returns after costs on a measured and sustainable basis leading to enhanced distributions growth without significant increased risk,” the firm said in the announcement.
“Further, the opportunity to gain access to the franking credits within Keybridge would be valuable for ADIT unitholders.”
The firm said it would anticipate that additional benefits such as an economy of scale and therefore enlarged entity’s capacity to reduce the management expense ratios currently charged to ADIT unit holders as well as synergies over the medium-term including administration and overhead expenses.