Washington H. Soul Patts (ASX:SOL)'s merger proposal to create $10b investment giant

Company News

by Michael Luu

Investment powerhouse Washington H. Soul Pattinson (ASX:SOL) is looking combine strength with industry peer Milton Corporation (ASX:MLT) in a merger that would form a $10 billion ASX-listed capital management giant.

The payment package consists of a scrip consideration, as Soul Patts is offering new securities in the company to Milton’s shareholders. The proposal values Milton shares at a 1 dollar or 10 per cent premium to Milton’s closing price of $5 on Monday.

The scheme includes the incentive of three fully franked dividends worth a total of 52 cents per share for Milton shareholders, if it successfully passes through.

The move has received the nod from Milton’s independent directors, as they intend to vote in favour of accepting the merger proposal. These board members are now recommending that other shareholders follow suit.

An independent analyst has given the verdict that the deal serves the best interests of Milton’s investors and remains the most lucrative offer.

Soul Patts Managing Director Todd Barlow addressed Milton’s shareholders, “We look forward to progressing this merger with Milton, with the view of welcoming Milton’s management team and up to 30,000 new shareholders and the benefits this will bring to both companies.”

On the other hand, the bidder’s board has signaled unanimous endorsement for the deal, believing the amalgamation will mutually benefit the two parties’ “enhanced liquidity, diversification and access to a broad range of asset classes”.

Shares in Washington H. Soul Patts (ASX:SOL) last traded at $30.25

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