The boards of Wilson Asset Management (WAM) Capital and Premium Investors (Premium) have agreed to a recommended offer to merge the two businesses.
Under the terms of the agreement, WAM Capital will acquire 100 per cent of Premium shares on a net tangible assets (NTA) to NTA basis, WAM Capital said in a statement to the Australian Securities Exchange (ASX).
WAM will offer Premium shareholders the option to exchange Premium shares for WAM Capital shares, elect to receive cash for their Premium shares, or a combination of both.
If the scheme is implemented, Premium chairman Lindsay Mann will be given a seat of the WAM Capital board.
"The independent directors believe the scheme is in the best interests of Premium shareholders and intend to vote their own premium shares in favour of the proposal," the statement said.
Treasury Group, a Premium investor, has indicated that in the absence of a superior proposal it intends to vote in favour of the scheme, Premium said in a separate statement to the ASX.
Premium shareholders will be asked to vote to approve the scheme of arrangement at a meeting expected to be held in late-November.
"The merger is consistent with our strategy to take select opportunities to grow the company for the benefit of WAM Capital shareholders," WAM Capital chairman Geoff Wilson said.
"The increased capital base will expand the range of opportunities available for investment."
Should the merger be approved, the new listed investment company would have combined assets of $300 million and over 8,500 shareholders.
