Wilson Asset Management (WAM) is attempting to restructure Century Australia Investments into a new listed investment company (LIC) that focuses on large-cap companies, marking its latest move to grow its LIC empire.
WAM, which is headed by LIC veteran Geoff Wilson, is looking to establish the WAM Leaders fund by overhauling the $64 million Century Australia Investments.
The board of Century was presented with a proposal from WAM to buy 100 per cent of the LIC’s shares through a buyback. The shares will be bought at net tangible asset value, minus the transaction costs.
Century shares are currently trading at 78¢ per share.
“We are creating WAM Leaders because a number of our shareholders want exposure to an actively managed large cap manager,” Mr Wilson said.
Century, whose assets were previously managed by high profile fund manager Peter Morgan, provides investors access to the sharemarket through its underlying manager, Perennial Value Management.
The LIC’s investment objective is to provide long-term capital growth and income by investing in “undervalued” Australian companies.
WAM’s proposal has so far won the approval of Century investors who had sent the LIC’s shares up 9 per cent by 2 pm AEST on Wednesday.
As part of the restructure, WAM will become Century’s new manager. The new fund will invest in Australia’s top 200 companies.
Mr Turner said shareholders should consider the offer, and the group will hold an extraordinary general meeting to discuss the issue.
“To assist shareholders in their consideration of the proposal, an independent expert will be engaged to prepare an opinion,” he said.
“The board will consider the advice of the independent expert and report to shareholders in the explanatory memorandum which will accompany the notice of the EGM.”