WAM Leaders, a listed investment company run by Wilson Asset Management, has entered into a scheme implementation agreement to merge with QV Equities (QVE).
This will see WAM Leaders acquire 100 per cent of QVE to create a single listed investment company with a larger capital and shareholder bases and greater on-market liquidity.
If the transaction proceeds, this will enhance WAM Leaders’ size and relevance in the market which will enable it to access more market opportunities, provide a lower management expense ratio and spread expenses across a larger pool of assets.
Net assets are expected to increase by $238.8 million on a pre-tax NTA basis to create a strategy with a market cap of almost $2 billion and 30,000 shareholders.
The first court date is set for mid–late May and an implementation date is expected in mid-July.
QVE shareholders will have the option to receive either new WAM shares, cash or a combination of both. For those who will opt for cash, they’ll have a 2.5 per cent discount to the pre-tax NTA per share.
Based on the most-recent pre-tax NTAs of QVE and WAM Leaders, QVE shareholders would receive 0.7609 new WAM Leaders shares for each QVE share they hold which represents an indicative market value of $1.058 per QVE share, a 16.9 per cent increase of the QVE closing price on 30 January.
WAM previously announced its takeover offer in January, and QVE has now completed a formal evaluation of the strategic options with QVE’s independent directors ultimately voting in favour of the scheme in the absence of no superior proposal and subject to the conclusion of an independent expert.
QVE chairman and independent director, Peter McKillop, said: “We are pleased to announce the proposed transaction, which represents an enhanced offer compared with the takeover offer and is an attractive proposition for QVE shareholders, providing the opportunity to narrow the persistent valuation discount to NTA and realise consideration for their shares at a premium to QVE’s recent share history.”
Geoff Wilson, chairman and chief investment officer at WAM Leaders, said: “The WAM Leaders board of directors and QVE’s independent directors believe that the scheme will be beneficial to both companies and result in a strong merged entity leveraging Wilson Asset Management’s investment strategy and experience in managing listed investment companies to the benefit of all shareholders.”
