LICs Milton and Choiseul have proposed to merge and create a company with $2 billion in assets.
Listed investment companies (LIC) Milton Corporation and Choiseul Investments have said that they are in talks to merge and create an entity with $2 billion in assets.
Under the proposal, which would be implemented by a scheme of arrangement, Choiseul shareholders will receive Milton shares and a fully franked special dividend, both companies said in a joint statement.
The payment of the special dividend is conditional on the scheme being implemented, and a favourable tax opinion.
"Milton's independent directors will work with the independent directors of Choiseul to finalise the details of the proposed merger," Milton managing director Frank Gooch said.
"It is anticipated that Milton and Choiseul will enter into a merger implementation agreement over the coming days.
"The proposed merger will create an investment company with approximately $2 billion of assets and more than 18,000 shareholders and will provide Choiseul shareholders with access to greater liquidity in the trading of their shares."
Choiseul independent managing director Richard England said that the proposed merger would create a company with a larger asset base and should reduce the combined entity's discount to net asset backing.
"The proposed merger will enable Choiseul shareholders to continue to benefit from the ongoing management of their investment by Milton," England said.
Choiseul was established in 1911, and Milton was incorporated in 1938.
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