I was struggling to fathom how this proposed giveaway benefits PGF holders then I found it. It's in the announcement:
"The PGF Board also believes that the Proposals will lead to a larger capital and shareholder base for PGF, which is expected to provide PGF shareholders with greater secondary market liquidity."
Hooray!! And that's as good as it gets.
To earn this boon all we have to do is:
-acquire underperforming assets for a price greater than NTA before tax (but don't worry, PM Capital will "FUND" the premium payable; not bear the cost of, just fund).
-acquire underperforming assets at an even higher premium to after-tax NTA (but don't worry, it's not like PGF would actually sell the underperforming assets and realise the tax liability, so it's not a real cost at all).
No one could argue that this proposal aligns with PGF's stated strategy of "building long-term wealth by finding and exploiting investment anomalies around the world". It's exactly contrary to it: destroy wealth by paying a premium for underperforming assets.
It looks to me like the PGF board is empire-building for their benefit, not ours. That's the only plausible explanation I can come up with.
PGF Price at posting:
$2.33 Sentiment: None Disclosure: Held
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