Australia’s Washington H Soul Pattinson and Co Ltd said on Tuesday it will buy Milton Corp to create a near A$11 billion ($8.29 billion) investment firm to broaden its exposure to other asset classes, including global equities.
Washington H Soul Pattinson’s (WHSP) offer implies a A$6 per share value, a 20% premium to Milton’s last close, valuing the smaller peer at A$4.05 billion ($3.05 billion).
Milton’s shares rose more than 16.0% to a record high, while WHSP’s stock gained as much as 3.6%.
WHSP, a 118-year old investment house, expects the deal to create a larger war chest to tap new asset classes, including expanding private equity and direct credit investments, and tap global equities.
Milton currently manages around A$3.7 billion in assets, mostly Australian equities.
The offer has been recommended by Milton’s independent board committee, WHSP said, and as part of the deal shareholders are expected to get three fully franked dividends totalling 52 Australian cents per share.
The deal is expected to complete by early October.
Source: Reuters.com