As reported by InvestorDaily on 23 October, SMSF administration business SuperIQ acquired Tranzact’s struggling SMSF offering after it experienced an impairment write-down of $967,000 and sustained a loss of client funds greater than expected.
“In light of the uncertainties in the industry related to regulation, the absence of any significant reinvestment opportunities, and the low investment returns available to the company on its surplus capital, the board considers a return of capital to shareholders as the most appropriate action to take,” Tranzact Financial Services chairman Anthony Ractliffe said in an ASX statement.
“A return of capital of 3 cents per share is proposed by the board.
“The proposed record date is mid-January, with the expected payment date being early February.”
The return of capital is subject to shareholder approval and to ASX approval of a waiver in respect of Listing Rule 7.25, which restricts capital reorganisation where the resulting share price will be less than 20 cents per share.
“The board is also mindful of the takeover offer that is currently in progress by Gro-Aust Holdings Ltd (the company’s majority shareholder), and in light of this, considers a return of capital to be appropriate,” Mr Ractliffe said.
In a letter to Tranzact shareholders on 6 November, Gro-Aust chairman Paul Foley made an offer of 12 cents cash for each Tranzact share.
Mr Foley pointed out that no competing offers are likely, given that Gro-Aust currently owns 60.4 per cent of the company.
The offer represents a 33 per cent premium on the 9 cents closing Tranzact share price on 5 November, and a 30.6 per cent premium on the six-month volume-weighted average price of Tranzact shares up to and including 5 November, said Mr Foley.
The takeover was extended yesterday and is now scheduled to close at 7.00pm Sydney time on 6 January 2014.
