At the end of February, PM Capital stated it had made a non-binding, indicative proposal to acquire 100 per cent of Platinum Capital and Platinum Asia Investment by way of a scheme of arrangement with the PM Capital Global Opportunities Fund.
Platinum Investment Management, in its capacity as responsible entity of the Platinum International Fund (PIXX), submitted a confidential and non-binding proposal last year to merge Platinum Capital Limited (PMC) with PIXX under a scheme of arrangement.
On Monday, Platinum announced to the ASX that an independent board has rejected PM Capital’s bid on the grounds that the proposal is not superior to Platinum’s plan to merge PMC with PIXX.
The bid was rejected for four reasons, including the reasoning that the Platinum proposal achieves the PMC board’s primary objectives to solve the discount on an ongoing basis while retaining investors’ chosen investment manager and strategy, and that it is in line with industry trends and investor sentiment.
Moreover, Platinum said premiums for listed closed-ended structures are often transitory, and the Platinum proposal is highly executable and proceeding according to schedule.
Expanding on this, it said: “Actively managed exchange-traded funds, such as PIXX, have become the clear retail investor preference for all but niche, less illiquid asset classes such as real estate, private equity and private credit.
“The vast majority of closed ended vehicles investing in listed equities trade at large discounts to NTA, with a number of closed ended vehicles, in recent years, having been wound up or converted to open-ended structures like PIXX as a consequence of their prevailing share price discounts.
“Investors should be highly cautious of any proposal that seeks to spruik a ‘point in time’ and/or ‘episodic’ premium to pre-tax NTA. This is because any such premiums are generally transitory and highly unlikely to survive the after effects of any proposed merger transaction. This has been borne out by the post-acquisition performance of several recent listed closed-ended vehicle mergers, which saw illusory ‘premiums’ quickly evaporate following post-deal trading.”
The shareholder meeting regarding the Platinum scheme of arrangement is expected to take place in late July 2025, and the firm said it is working collaboratively with the Platinum board.
