see the fund manager squirm
WAM Capital is seeking to buy rival listed investment company Concentrated Leaders Fund (CLF), in a move that could kick off a round of consolidation in the sector.
WAM Capital has offered two of its own shares for every 3.7 CLF shares, which was a 15.7 per cent premium to CLF's closing price on September 2 and a 7.6 per cent premium to its reported pre-tax net tangible assets at July 31. WAM Capital made its bid via a conditional off-market takeover offer on Thursday night.
WAM Capital said its bid came after the smaller listed equities company's shares had traded at substantial discount to NTA over the past 12 months.
CLF had assets worth $104.8 million as at June 30 and a $30 million loan. Its investment portfolio included stakes in A2 Milk, Altium, Amcor, APA Group, Appen, ANZ Banking Group, Coles Group, CBA, Goodman Group, Macquarie Group as at June 30. About 85 per cent of its portfolio was in equities at June 30, while the rest was cash. CLF also had franking credits worth $10.1 million at June 30.
CLF is run by David Sokulsky, of Sydney-based Carrara Investment Management, who formerly worked at Crestone Wealth Management, UBS and Macquarie.
WAM Capital is the biggest LIC in Wilson Asset Management's stable. WAM Capital had $1.56 billion gross assets at June 30, including a $7.6 million investment in CLF.