Templeton’s only ASX LIC set to merge with Wilson Global
Link copied to
Barely a day after listing it’s eighth ASX Listed Investment Company (LIC), Wilson Asset Management announced its WAM Global LIC (ASX:WGB) is merging with Franklin Templeton’s Global Growth Fund (ASX:TGG).
LICs work very similar to ETFs (Exchange Traded Funds) in that investors can buy and sell them like regular shares and they track a portfolio selected by the relevant fund managers.
Unlike ETFs they tend to track broader equity strategies rather than specific benchmarks or sectors.
Wilson Asset Management operates eight of them, one of which WAM Strategic Value (ASX:WAR) listed yesterday and the other seven have made an average return of 34 per cent.
Templeton first listed its Global Growth Fund in May 1987 but it has stagnated in recent years from an ASX share price perspective.
After hitting $1.52 in mid-2018 it gradually declined, bottoming out at $1.04 in early April last year and only surpassed that high this morning.
Last October it announced a strategic review which promised to seek options to maximise value for shareholders.
Today it revealed the approach of Wilson (specifically Wilson’s WAM Global LIC (ASX:WGB) which focuses on international equities) and that it would recommend shareholders consent to the deal.
The companies promoted that the merged entity would create a LIC with net assets of $945 million (thereby increasing liquidity) and accessing Wilson’s investing strategies.
“The WAM Global Board of Directors believe that the scheme will be beneficial to both companies and result in a superior merged entity leveraging Wilson Asset Management’s proven investment strategy,” said Wilson boss Geoff Wilson.
“We look forward to welcoming TGG shareholders to the Wilson Asset Management family as we continue to grow WAM Global.”
TGG’s current market cap is approximately $310 million and shareholders in TGG will be paid in WAM Global shares – the exact amount will ultimately be calculated by reference to the NTA (net tangible assets) per share after tax.
The deal is expected to complete by the end of October 2021.
Templeton slightly rose off the back of the deal while WAM Global slightly declined.