The board of PM Capital Asian Opportunities fund has urged its shareholders to reject the takeover bid by WAM Capital.
On 5 November, WAM Capital announced to the Australian Securities Exchange (ASX) that an earlier bid to acquire the PM Capital Asian Opportunities (PAF) was now “unconditional and free from defeating conditions”.
The offer from WAM valued the shares in PAF at $1.146 per share which represented a 5.1% premium to PAF’s share price on 5 November, 2021.
This followed an earlier bid on 15 September by PM Capital Global Opportunities fund to acquire the fund which had been determined to be in the best interest of PAF shareholders by an independent expert.
However, on 8 November, PAF issued its own statement to the ASX stating shareholders should reject this bid.
“The PAF directors (who comprise the PAF board committee) ask that PAF shareholders should reject WAM’s takeover bid by taking no action in relation to it and to not act on documents sent by WAM,” it said.
This was because the proposal by WAM was not judged to be “superior” to the one by PGF and was not in the best interest of PAF shareholders.
Other problems included missing out of CGT rollover relief, the Australian focus of the WAM strategies, the risk the premium to post-tax net tangible assets per share may reduce and the risk of a 15.5% post-tax NAT dilution.