Listed investment company Premium Investors has decided to buy back an additional 8 per cent of its outstanding shares in an effort to raise the net tangible asset (NTA) per share.
The decision comes as the company is criticised for its low share price, which currently trades at a 16 cent discount to its NTA of 89 cents after taxation.
The criticism comes from Dixon Advisory, which has requested that Premium's board steps down in favour of Dixon employees.
Dixon said the board had not adequately undertaken capital management of the firm.
Dixon, which is supported by a group of shareholders representing just over 1 per cent in Premium, proposes to either buy back up to 75 per cent of outstanding shares against a 3 per cent discount or wind the company up all together.
"We want to provide liquidity to people who want to redeem at a rate close to NTA," Dixon managing director of strategy Chris Brown said.
Brown called Premium's intention to buy back more shares a good small step, but said it was not enough to fix the liquidity problem.
Premium chairman Tom Collins admitted that its new share buy-back program could not be seen independent from Dixon's proposed board changes.
"We held a buy-back a month ago and the response to that was such that we decided there was interest," Collins said.
"I can't say the Dixon resolution had no impact, but the primary thing was to finish what we started, and go back to the market and buy back the other 8 per cent."
The company advised shareholders not to support the Dixon proposals and said it would come out with a motivation for its decision in the next two days.
