Absolute Equity (ASX:AEG) to merge with WAM (ASX:WLE), shares fall

2 min read | June 14, 2022 12:57 PM AEST | By Bhawna Gupta

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Absolute Equity (ASX:AEG) to merge with WAM (ASX:WLE), shares fall — Image source: © Pattanaphongphoto | Megapixl.com

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Highlights

Investment firm AEG is merging with another investment company WAM Leaders Limited.

AEG shareholders will receive new WAM Leaders shares in exchange for their AEG shares as part of the deal.

Both companies’ shares were trading in the red on the merger announcement.

Investment firm Absolute Equity Performance Fund Limited (ASX:AEG) today (14 June 2022) announced that it is merging with another investment company WAM Leaders Limited (ASX:WLE).

On the back of the news, both companies’ shares were trading in the red. At 12.14 PM AEST, AEG shares were 2.39% down, trading at AU$0.82 each, while WAM Leaders shares were trading at AU$1.42 apiece, down 4.71% on ASX.

More about deal

AEG shareholders will receive new WAM Leaders shares (Scrip Consideration) in exchange for their AEG shares under the Scheme. The number of WAM Leaders shares to be offered for each AEG share will be established using a method based on the ratio of WAM Leaders' pre-tax net tangible assets (NTA) to AEG's pre-tax NTA.

Using the latest available pre-tax NTAs of WAM Leaders (30 April 2022) and AEG (31 May 2022), AEG shareholders would receive 0.622 new WAM Leaders shares for each AEG share they hold under the Proposed Transaction, with an indicative market value of $0.92 per AEG share, representing a 10.6% uplift over the closing price on 10 June 2022.

The WAM Leaders Board currently intends to ensure that all AEG shareholders who receive WAM Leaders shares under the Scheme are eligible to receive any fully franked final dividend paid by WAM Leaders in FY2022.

How will the deal benefit both WAM Leaders and AEG?

Wilson Asset Management will oversee the proposed transaction, which will result in a single publicly traded investment business with a larger capital and shareholder base.

Here is how the merged entity will benefit both the companies:

Also Read: PL8, FGG: These 2 ASX investment firms to pay dividend in May 2022

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