PM Capital hits back at rejected Platinum bid
PM Capital has hit out at Platinum Asset Management, saying the firm only provided “limited engagement” following its bid for listed investment companies (LICs).
On 7 April, Platinum stated it had rejected the bid from the PM Capital Global Opportunities Fund (PGF) as it believed it did not represent a superior proposal to the original plan which would see the LICs merged with Platinum’s two existing active ETFs.
This would have seen PGF acquire 100 per cent of the two LICs – Platinum Capital (PMC) and Platinum Asia Investment (PAI) – by a scheme of arrangement.
In a response to the ASX, PM Capital said it was “surprised with the outcome” of the board review.
Chris Knoblanche, chairman of the PGF board, said: “PGF is surprised with the outcome of the PMC and PAI boards’ review and continues to believe that the PGF proposals offer PMC and PAI shareholders with significantly better financial outcomes compared to the existing Platinum schemes, as well as the opportunity to remain exposed to a global value-style investment within a listed investment vehicle.”
It particularly singled out the lack of engagement there had been between the two firms over the six-week period following the original bid. This had left PM Capital unclear on why the bid was rejected, it said.
“PGF notes that it has had very limited engagement with the boards of PMC and PAI over the approximately six weeks since the PGF proposals were provided, despite the explicit fiduciary carve-out in the Platinum schemes which provides that the boards are not restricted from engaging with PGF whereby a competing proposal is, or could reasonably be considered to become, a superior competing proposal.”
In its verdict, Platinum stated it had rejected the deal as it felt the existing proposal was in line with industry trends and investor sentiment, was progressing on schedule, and that premiums for closed-ended structures were often transitory. It also felt the existing proposal would achieve the board’s objectives to solve the discount on an ongoing basis while retaining investors’ chosen investment manager and strategy.
Knoblanche concluded PM Capital was open to re-engaging with Platinum at a later date if it became appropriate to do so, reaffirming he believed PGF had better investment performance than the Platinum vehicles and the disruption caused by recent Platinum investment team changes.
AUTHOR
Laura Dew
Recommended for you
Natixis Investment Managers has hired a distribution director to specifically focus on the firm’s work with research firms and consultants.
The use of total portfolio approaches by asset allocators is putting pressure on fund managers with outperformance being “no longer sufficient” when it comes to fund development.
With evergreen funds being used by financial advisers for their liquidity benefits, Harbourvest is forecasting they are set to grow by around 20 per cent a year to surpass US$1 trillion by 2029.
Total monthly ETF inflows declined by 28 per cent from highs in November with Vanguard’s $21bn Australian Shares ETF faring worst in outflows.
