PIS/Centrepoint merger to proceed
Professional Investment Holdings (PIH) will achieve its long-awaited listing ambitions through a merger with listed insurance premium funding company, Centrepoint Alliance.
The merger was confirmed to the Australian Securities Exchange today, with Centrepoint chief Tony Robinson saying the due diligence process had not highlighted any unanticipated issues.
However, the group said the merger agreement had been amended to reflect "market movements, and a more detailed understanding of contingencies for claims and key property value expectations".
Key changes to the initial merger agreement include the provision to PIH of $7.5 million in funding via a convertible note.
The merger ratio has also been amended - PIH shareholders will now hold 75 per cent of the shares in the merged entity, as opposed to the 80 per cent previously announced, and this will be the case after Centrepoint has returned 2.5 cents per share to each of its existing shareholders.
The merger is expected to be implemented by 1 January, 2011. Centrepoint hopes this will allow PIH time to dispose of the property asset currently on its balance sheet - a shopping centre in Sydney’s western business district, Parramatta. A PIH subsidiary, Parramatta Site Developments, acquired the shopping centre in September 2008. Professional Investment Services paid 80 cents in the dollar to clients it advised invest in the failed development.
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