04/01/2022 - 15:58

WAM, Westoz to merge

04/01/2022 - 15:58

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Perth broking firm Euroz Hartleys Group is set to merge two of its investment companies with fellow ASX-lister and Geoff Wilson-led WAM Capital.

WAM, Westoz to merge
Dermot Woods, Westoz Funds Management. Photo: Gabriel Oliveira

Perth broking firm Euroz Hartleys Group is set to merge two of its investment companies with fellow ASX lister and Geoff Wilson-led WAM Capital.

The deal was announced at the end of December, when the companies revealed they had entered a scheme implementation agreement to merge the entities.

WAM is set to acquire all shares in Westoz Investment Company via a scrip deal, under which Westoz shareholders will receive new WAM shares as consideration for their stock.

The number of shares will be determined based on the ratio of the WAM Capital share price to the net tangible assets of Westoz before tax.

Based on the parties’ share prices at November 30, however, Westoz shareholders would receive 0.65 new WAM shares for each share they held appraised at $1.45 apiece.

On these numbers, the deal works out to approximately $193 million.

Should the transaction proceed, the companies say the entity would have a pre-tax net tangible asset per share of roughly $1.8 billion.

In tandem with this buy, WAM also announced it would acquire Ozgrowth, a WA-centered investment portfolio managed by Westoz Funds Management.

This deal is independent of the WAM Westoz proposal.

Westoz chair Jay Hughes commented on the planned merger.

“An investment in WAM Capital through the proposed transaction offers our shareholders greater liquidity and a more favourable alignment between market price and underlying asset value for their holdings,” Mr Hughes said in a statement.

WAM Capital also offers a similarly successful track record of underlying portfolio performance.”

Westoz directors say they plan to vote in favour of the proposed transaction.

WAM Capital chair Geoff Wilson said he believed the merged entity would provide shareholders with appealing benefits.

“We look forward to welcoming Westoz shareholders to the Wilson Asset Management family,” Mr Wilson said.

Subject to approvals, the deal is set to be completed by April 21.

WAM Capital shares last traded at $2.23.

Westoz shares closed the day down 0.38 per cent to trade at $1.30.

Ozgrowth shares last traded at 34 cents.

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