Platinum scraps LIC conversion after L1 Capital opposition
The possibility of a dissenting vote from shareholder L1 Capital has led Platinum Asset Management to scrap its conversion plan for the $450 million Platinum Capital LIC.
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.
Platinum hoped this option would allow shareholders to continue to access Platinum’s investment strategy via an ASX-quoted vehicle with the same investment objective as the LIC and hold units that will trade close to their net asset value, and a scheme meeting was scheduled for 12 August.
But the plan hit a snag on 12 June 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.
This has posed problems as there is a high voting threshold of 75 per cent to approve the deal and at least 50 per cent of shareholders present at the scheme meeting.
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 this required 75 per cent approval threshold.
“Having regard to anticipated voter turnout and L1 Capital and its associates’ notified intention to vote against the scheme, the company believes the scheme will not receive sufficient support to meet the 75 per cent approval threshold required for a scheme of arrangement,” it said in an ASX statement.
Initially, there was no alternative competing proposal put forward for the LIC, but now L1 Capital has made its own non-binding indicative proposal. This would be for the LIC to enter into a new management agreement with L1 Capital where the vehicle would be managed using the same investment strategy as L1’s Global Long Short Fund.
“Under the new agreement, L1 Capital would manage the company’s investment portfolio employing L1 Capital’s Global Long Short investment strategy which is substantially the same as the Long Short investment strategy that L1 Capital currently employs in respect of the L1 Long Short Fund Ltd but with no geographic constraints.”
L1 is also seeking to replace Rachel Grimes, David Gray and Douglas Farrell as directors of the LIC, while current directors Margaret Towers and Ian Hunter will have to resign and, if elected, the new board will assess the viability of L1’s indicative proposal.
Towers has served on the board since March 2018, while Hunter joined in September 2021.
Existing director Joanne Jefferies, who joined in June 2025, will remain on the board, as well as newly elected Katrina Glendinning, who joined the board this week as an independent non-executive director. Glendinning was formerly the chief financial officer at Pengana Capital Group until her departure last July after 22 years.
The general meeting on 12 August will still proceed, and shareholders will instead be asked whether they approve an on-market share buy-back of no more than 20 per cent of the LIC’s shares.
AUTHOR
Laura Dew
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