I've voted FOR Resolution #3 = Approval of Proposed Transaction and FOR #4 Return of Capital to shareholders.
Not mentioned so far. nta per share at 31 March 2023 = $1.46 franking credits per share at 31 March 2023 = 10.511 / 34.764 = 30.2c Gross tax losses not on the balance sheet = $56.5M worth $16.9M worth something to Resimac if they transferred with the business finance division.
Franking credits attached to the 19c special dividend = 8.1c . nta per share if transaction is approved = $1.71 to $1.74 .
I sympathize with friendlydwarves ie agitate for a bigger payout than 45c . The first post by TruthHunter ( time 18:13 ) where he votes for the transaction aligns more with my thinking.
I have NO confidence that small shareholders can greenmail their way to a better deal from Resimac . I don't think it is realistic.
The current business finance division will likely be cash flow negative for an extended period as it attempts to grow means NO DIVIDENDS are likely indefinitely. Good idea to offload = sell the Business Finance Division at a premium to assets while there is a buyer. Resimac offer is greater than other interested parties at the moment and deemed fair and reasonable by Grant Thornton. Selling the division is a step in the right direction of orderly liquidation of assets.
I agree with FD and TH that a cash lite LIC investing in small non bank financial companies is NOT attractive. New TGA post transaction will not pay dividends until end of 2026 at the earliest.
If the transaction does not proceed with the prospect of NO dividends indefinitely I think the share price will tank to less than 50% of nta like Humm. ie less than 50% x $1.46 . If the transaction proceeds the discount to the nta will likely be less than 50% say 20 to 25% if mostly cash or a higher discount as cash converted to small listed financial companies.
However if TGA is still over 50% cash within the 6 months after June 2023 the ASX may force a liquidation of assets with proceeds returned to shareholders - better chance of a payout close to $1.71. May also be a voluntary liquidation if Directors abandon plans to be LIC lite. Geoff Wilson at WAM is targetting LICs with big discounts to nta , a high cash LIC would be attractive.
My thinking if I want to sell TGA in the next 3 years. Transaction not passed : I sell at 50% x 1.46 = 73 c . Transaction passes: my proceeds = 26 + 19 + 8.1 + 75% x ( 171 - 45 ) = 147.6c . Transaction worse case if all cash converted to listed shares = 26 + 19 + 8.1 + 50% x ( 171 - 45 ) = 116.1c . The 2nd option and 3rd options look better to me.
The above is not advice but simply an explaination why I voted for the transaction.
