PMC Strategic Review Concludes with Proposed Scheme of Arrangement with PIXX
PMC (PMC) Share Update July 2024 Tuesday 23rd
PMC Announces Strategic Review Results and Proposed Scheme of Arrangement
Platinum Capital Limited (ASX: PMC) has announced the results of its formal strategic review, revealing plans to pursue a scheme of arrangement with the Platinum International Fund (ASX: PIXX).
Instant Summary:
- PMC conducted a strategic review to maximize shareholder value.
- An independent adviser was appointed to assess different strategic options.
- PMC will pursue a scheme of arrangement with PIXX.
- PMC shareholders will receive PIXX units in exchange for their PMC shares.
- The arrangement aims to close the share price discount to net tangible asset backing.
Strategic Review and Decision
On 26 April 2024, the Board of Platinum Capital Limited (PMC) announced a formal strategic review to explore options for maximizing shareholder value. The primary goal was to reduce the share price discount to the pre-tax net tangible asset backing per share.
Following the review, the Board appointed an independent corporate adviser to help evaluate various strategic options. After thorough consideration, the Board has decided to pursue a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) with the Platinum International Fund (Quoted Managed Hedge Fund) (ASX: PIXX).
Details of the Scheme
PIXX is an open-ended managed fund with units quoted on the ASX AQUA market. If the scheme is implemented, PMC shareholders will receive PIXX units in exchange for their PMC shares. The number of PIXX units issued to each PMC shareholder will be based on the relative NAV per unit of PIXX and the post-tax net tangible asset backing per share of PMC, after adjusting for transaction costs and the impact on PIXX unitholders.
This arrangement will allow PMC shareholders to continue accessing Platinum Investment Management Limited's global equity investment strategy through an ASX-quoted vehicle with the same investment objective as PMC. Additionally, holding units in PIXX will enable shareholders to trade close to their net asset value, addressing the Board's objective of closing the share price discount.
Next Steps and Approvals
The scheme of arrangement is subject to the execution of a binding scheme implementation deed between PMC and Platinum as the responsible entity of PIXX. It also requires approval from PMC shareholders and the Court.
The Board looks forward to providing a further update by the end of September 2024.
This strategic move is expected to positively impact PMC's stock by addressing the share price discount issue. By transitioning to PIXX units, shareholders will benefit from a more accurate reflection of the fund's net asset value, potentially boosting investor confidence and market performance.
Investor Reaction:
Initial reactions from investors and analysts have been cautiously optimistic. Many see the move as a strategic effort to enhance shareholder value and improve market perception. However, some caution remains as the scheme requires multiple approvals before implementation.
Conclusion:
Investors should keep an eye on the upcoming updates and approvals related to the scheme of arrangement. This strategic decision by PMC could lead to significant changes in shareholder value and market dynamics. Staying informed on further developments will be crucial for making well-informed investment decisions.