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Key Points:
- UIL Acquires 95.03% of Zeta Resources: UIL is set to merge Zeta's investment platform with its own after acquiring GPLPF’s 187 million shares in Zeta.
- Transaction Valued at £28.7 Million: UIL will settle the purchase with a mix of shares and the transfer of its Allectus Capital investment.
- No Net Asset Dilution: UIL’s net asset value per share will remain undiluted, with Zeta’s value being fully reflected in UIL’s financial reporting.
UIL Limited (LSE:UIL) has announced its decision to merge its investment platform with Zeta Resources Limited, marking a significant development in its portfolio management strategy. Through a sale and purchase agreement with General Provincial Life Pension Fund Limited (GPLPF), UIL will acquire all 187,572,396 Zeta shares held by GPLPF, leading to UIL owning 95.03% of Zeta’s share capital. Additionally, UIL plans to acquire the remaining shares in Zeta that it does not currently own through compulsory acquisition.
Key Highlights:
- Acquisition Agreement: UIL acquires GPLPF’s entire holding of 187,572,396 ordinary shares in Zeta Resources, bringing UIL’s total ownership of Zeta to 95.03%.
- Transaction Structure: The deal is valued at £28.7 million and will be settled through the transfer of UIL’s Allectus Capital investment and the issuance of 9,504,199 new UIL ordinary shares to GPLPF.
- Strategic Benefits: This transaction will streamline UIL’s asset management, as Zeta's valuation will now be based on its underlying net asset value.
Deal Overview
The sale and purchase agreement between UIL and GPLPF represents a significant step in UIL's strategy to consolidate its investment portfolio. As a result of the agreement, UIL will take ownership of 95.03% of Zeta’s share capital, a major increase in its stake. UIL has also issued a notice of compulsory acquisition to acquire the remaining shares of Zeta it does not own, in accordance with Section 103 of the Companies Act 1981 of Bermuda.
The acquisition’s value is based on Zeta’s net asset value per share as of 8 October 2024, which stands at AUD $0.2973 per share. GPLPF’s Zeta shares, totaling 187,572,396, are valued at £28.7 million. This consideration will be satisfied in two parts: a transfer of UIL’s Allectus Capital Limited investment, valued at £12.8 million, and the issuance of 9,504,199 new UIL ordinary shares at £1.6655 per share. The price per UIL share reflects its net asset value as of 8 October 2024, adjusted for its Zeta valuation.
The transaction ensures that UIL's net asset value per share will not experience dilution, allowing for a smooth financial transition. Going forward, starting on 11 October 2024, UIL’s daily net asset value reporting will reflect Zeta’s net asset value per share as its underlying value.
Strategic Implications
By acquiring a majority stake in Zeta Resources and integrating its platform, UIL is aiming to streamline its operations, better manage its assets, and potentially increase returns for its shareholders. The acquisition brings Zeta’s investment management under UIL’s control, offering greater synergies and oversight.
Allectus Capital Limited, which is being transferred as part of the consideration, is an unlisted investment company with a portfolio of technology businesses. The transfer allows UIL to restructure its portfolio in a way that reflects its strategic goals, shedding Allectus in exchange for a larger stake in Zeta.
Furthermore, this transaction strengthens UIL's relationship with GPLPF, a related party that already holds 65.5% of UIL’s ordinary shares. After the new shares are issued and admitted to the London Stock Exchange, GPLPF will hold 69.0% of UIL’s expanded share capital.
Admission of New Shares
UIL has applied to the London Stock Exchange to have the newly issued 9,504,199 shares admitted to trading on the Specialist Funds Segment of the Main Market. The admission is expected to occur around 14 October 2024. Once the admission is complete, UIL will have 93,259,784 ordinary shares in circulation with voting rights.
This move marks a significant change in UIL’s share structure, enhancing GPLPF’s stake in the company while increasing UIL’s ownership of Zeta Resources. With the acquisition completed, UIL is positioned to capitalize on the strategic benefits of full control over Zeta’s investment portfolio.
