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Platforms reveal merger details

Powerwrap has released its target statement recommending its shareholders accept the off-market takeover offer moves forward with Praemium.

The target statement prices Powerwrap at 29.75 cents per share based on a price of 44.50 cents per Praemium Share as at July 28.

Praemium will split the $55.6 million purchase price as 7.5 cents per share in cash and one Praemium share for every two Powerwrap shares.

It is also the largest shareholder of Powerwrap with a 15.1% stake in the business.

Praemium chair Barry Lewin said: "The merger is an exciting opportunity for Powerwrap and Praemium shareholders alike. For many years, Praemium has been on a growth trajectory with a recent history of generating steadily growing profitability."

The merger of the platform providers will create the second largest independent specialised platform provider with combined funds under administration just shy of $29 billion.

The target's report states the merger will improve inflows, create a more a more diversified customer base, international reach and a larger more flexible balance sheet, which is expected to accelerate the disruption of the sector's incumbent platforms.

The offer will enable the merged group to have a number of important differentiators from those in the Australian platform market including being the only adviser platform that operates in Australia, the United Kingdom and various other offshore markets.

In addition, Powerwrap will have access to the full suite of enhanced Praemium technology, strengthening the ability to serve the high net worth investor (HNWI) segment.

"Praemium's capabilities with respect to reporting, and in particular tax reporting, offer a significant competitive advantage to the HNWI market segment," the statement said.

Praemium's administrative and reporting strength can be combined with Powerwrap's existing execution capabilities and broad range of alternative investment options. This in-turn can create a highly attractive option for the HWNI market as a specialist platform solution.

Chair of Powerwrap Anthony Wamsteker said the directors of Powerwrap unanimously recommend to shareholders that in the absence of a superior offer to accept the offer for all Powerwrap shares.

"The board of Powerwrap believes the offer presents an excellent opportunity for Powerwrap shareholders to participate in the upside of the merged group that stands to benefit from significant potential synergies," he said.

The offer, unless withdrawn, will remain open until August 31.

Read more: PowerwrapPraemiumAnthony WamstekerBarry Lewin
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