In an explanatory memorandum for investors posted on the ASX website yesterday, SFGA’s directors made clear that they “unanimously recommend that [shareholders] vote in favour of the scheme, in the absence of a superior proposal”, adding that the proposed acquisition by IOOF is in the “best interests” of shareholders.
“[SFGA’s] directors acknowledge the merits of consolidation in the financial services industry and recognise that a combination of IOOF and SFGA has the potential to create significant value for SFGA shareholders and also to provide benefits for clients of the combined group, such as access to additional products and services,” said SFGA chairman Peter Promnitz in the explanatory memorandum.
“This is a significant step in the journey of SFGA and is consistent with the company’s strategy of achieving growth through organic growth, tuck-in acquisitions and transformational mergers and acquisitions,” Mr Promnitz continued.
In addition, the document assures shareholders that the proposed scheme will result in “best of breed advice” being provided by staff of the new consolidated entity, as well as offering “the scale and competitive advantage” a merger would bring.
IOOF chairman Dr Roger Sexton listed advice, SMSF administration, investment management, portfolio administration, accounting and insurance as the key service provision focuses of a combined entity should the scheme be approved.
“On behalf of the IOOF board, I encourage you to vote in favour of the scheme and look forward to welcoming you as an IOOF shareholder,” Dr Sexton added.
The explanatory memorandum follows an investor research document issued by Morningstar in which it was suggested that the companies face “integration risk” should the scheme be approved.
A copy of the explanatory memorandum has been registered with ASIC.
