WAM Leaders, a listed investment company managed by Wilson Asset Management, has announced its plan to launch an off-market takeover bid for New South Wales-based investment firm QV Equities.
According to the fund manager, the proposed bid offers 1 WAM Leaders share for every 1.4675 QVE shares, representing a value of about $0.951 per QVE share based on WAM Leaders’ share price as of 30 January 2024, and provides QVE shareholders with an exit following problems in portfolio performance and ongoing share price discounts.
“Since listing in August 2014, QVE’s investment portfolio has underperformed. The underperformance of the investment portfolio has been compounded by QVE’s persistent and widening share price discount to net tangible assets (NTA),” WAM Leaders stated in a media release on the Australian Securities Exchange (ASX).
“The QVE board of directors has been unable to return value to shareholders and has not succeeded in implementing effective capital management initiatives to manage the persistent share price discount to NTA.
“In making this offer, WAM Leaders is providing all QVE shareholders with the opportunity to exit their positions in QVE at a 6.3 per cent premium to QVE’s one-month volume-weighted average price of $0.8933.
“If this offer is successful, it will provide QVE shareholders with the opportunity to be invested in one of the largest listed investment companies on the ASX.”
According to the listed investment company, accepting the offer to become WAM Leaders shareholders would grant access to a stable investment strategy, higher fully franked dividend yields and reduced management expenses.
The bid is also expected to enhance market relevance for current WAM shareholders, allowing them to acquire QVE shares at a discount to their current underlying pre-tax NTA.
“The WAM Leaders board of directors believe the off-market takeover bid will provide WAM Leaders shareholders with access to greater on-market liquidity through a larger market capitalisation of almost $2.0 billion (based on the WAM Leaders share price on 30 January 2024) with approximately 30,000 shareholders,” the fund manager stated.
“On a pre-tax NTA basis, it is expected that the WAM Leaders net assets will increase by approximately $229 million (as at 25 January 2024) by acquiring 100 per cent of QVE under the offer.”''