PM Capital bids for 2 Platinum LICs
PM Capital’s Global Opportunities Fund has made a binding offer to acquire the two listed investment companies run by Platinum Asset Management.
The firm has made non-binding, indicative proposals to acquire 100 per cent of the two LICs – Platinum Capital (PMC) and Platinum Asia Investment (PAI) – by a scheme of arrangement with its PM Capital Global Opportunities Fund (PGF).
It also said the investment team changes at Platinum announced this week could cause “potential uncertainty” for shareholders in the vehicles as well as the investment underperformance. The staffing changes have seen co-CIOs Andrew Clifford and Clay Smolinski both step down from their roles.
“The proposals represent an opportunity for PMC and PAI shareholders to exchange their shares for PGF shares at material premium to recent share prices,” it said.
“PGF considers that the proposals reflect compelling, superior alternatives to PMC’s proposed scheme of arrangement with Platinum International Fund (PIXX) and PAI’s proposed scheme of arrangement with Platinum Asia Fund (PAXX) and has been seeking to engage with the PMC and PAI boards.
“The PGF board also believes that the proposals will lead to a larger capital and shareholder base for PGF which is expected to provide PGF shareholders with greater secondary market liquidity.”
Platinum had previously announced last year that it would be merging the two LICs into its quoted managed hedge funds.
Its Platinum Asia LIC would enter a scheme of arrangement to merge with the open-ended Platinum Asia Fund (Quoted Managed Hedge Fund), which is $85 million in size. Meanwhile, the Platinum Capital LIC will enter a scheme of arrangement to merge with the open-ended $284 million Platinum International Fund (Quoted Managed Hedge Fund).
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.
However, since being announced last July, there have been delays to this proceeding due to the need for Platinum to await tax guidance from the Australian Taxation Office (ATO) and CEO Jeff Peters forecast it could take until July 2025.
There is no certainty that either proposal from PM Capital will lead to a transaction and it will be conditional on the PGF board determining the transaction is in the best interests of shareholders.
AUTHOR
Laura Dew
Recommended for you
Australian Ethical has become the latest fund manager to flag an expansion of its private markets range while reporting a 50 per cent rise in statutory net profit after tax in the first half of FY25.
Costs associated with the failed KKR deal have caused Perpetual’s statutory net profit after tax to more than halve to $12 million for the first half of FY25.
The exit of co-CIOs Andrew Clifford and Clay Smolinski from Platinum has highlighted key person risk, with Morningstar raising its outflow forecast to 33 per cent of FUM per annum in response.
Regal Partners has expanded on its decision to walk away from a potential acquisition of Platinum as it shares its full-year results.
