WAM Capital has opened a month-long offer to shareholders of a LIC that it wants to take over, with bidder's statements distributed yesterday.
Last month WAM Capital said it would attempt to take over a listed invested Wealth Defender Equities (WDE) managed by Perennial which it said had underperformed consistently since inception.
The offer is now open and will run until October 14, unless withdrawn or extended.
Wealth Defender Equities can get one share in WAM Capital for every 2.5 WDE shares that they own.
WAM Capital is giving WDE shareholders two options: to remain a WAM shareholder or to exit the position, leveraging WAM's on-market liquidity.
It is encouraging the WDE shareholders to accept the offer as soon as possible, noting that the offer currently remains conditional.
If WAM ends up acquiring more than 50% of the WDE's shares, it will undertake a strategic review of the company including its strategy, operations, activities, assets and employees based on the information that becomes available to it then and to which it currently doesn't have access.
The review will help WAM determine if it should realise WDE's investments and return capital; explore other investment strategies for WDE's remaining cash; and provide for its liabilities.
If WAM gets 90% of WDE shares from the offer, it intends to acquire the remaining shares, remove it from the ASX, and replace all its directors and nominees. WDE has no employees based on publically available information but WAM may redeploy or make them redundant, compensating benefits per their entitlements.
If WAM acquires between 50.1% and 90%, it will seek to appoint a majority of WAM nominees to WDE's board; may seek a de-listing; and acquire more shares.
WAM has not yet decided whether it will acquire further WDE shares if it ends up with less than 50.1% but said its ability to affect the intentions will be significantly limited if its share is non-controlling.
The three case scenarios are conditional and depend on a post-offer strategic review of WDE.