Ann: Notice of AGM & Signed Independent Expert Report, page-4

Okay, I'll play.

I think the sale to RMC is sort of fine, I wouldn’t have a huge objection to it by itself.

The problem however is this. Post-sale,TGA plans to keep most of its cash / assets and, without using these exact words,basically become a LIC. See numbered page 2 of the Notice of AGM where they summarise the plan with a whole lots of words that basically mean “we’re going to keep most of Thorn’s cash and play with it”: “if the Proposed Transaction proceeds, it will enable Thorn to direct its full focus as well as necessary additional funding to deliver on its staged transition of its business with afocus on active investments in the non bank financial services sector that align with Thorn's core business strategy as a diversified small business focused financial services organisation”.

So, they plan to effectively be a LIC. Well onASX LICs currently trade at an average 20% NTA discount. And that’s mostly companies that always planned to be LICs and have expertise in the space and have shareholders who willingly signed up to that. If TGA becomes a LIC, whether overtly or effectively, in my view we can expect it to trade ata much greater NTA discount than even 20%, given:
(1) many of TGA’s shareholders won’t want to be there and so will be sellers of TGA scrip (perhaps exactly what Somers is hoping for / banking on, frankly), and
(2) Somers has put forward this very transaction so clearly doesn’t want TGA liquidation and won’t propose it or support it in the short or medium term, and
(3) Somers already controls TGA so there will be zero prospect of anyone else being able to later force liquidation, and
(4) Thorn and its directors have little or no investment track record and little or no LIC expertise (and their sole recent investment using TGA money was in May when TGA spent $5m on shares in MME.AX at 8cps, on which we're currently down 15%), and
(5) I’d think virtually no-one trusts Somers / TGA’s directors, especially after that utterly scandalous nonsense from 2020 that got them absolutely toweled at the Takeovers Panel.

NAV post-sale will be $1.71 to $1.74. Payouts will be 26cps in capital and 19c in ff div, but TGA will retain “cash and investment assets” of “$35m - $37m” ie about $1.00 - $1.07 based on 34.76m SOI. Remaining net assets would be $43.44m so about $1.25/sh. However you want to cut it, 45c is a miserable payout. It should be much, much higher.

My very strong view is thus that Thorn shareholders should vote this deal down, lest we be stuck in a Somers-controlled LIC trading at probably a 30%-50% discount to NAV. All this deal would do is further entrench Somers, and enable Somers to continue slowly buying TGA shares super cheaply,at the expense of all of us, until Somers gets to 90% when it can move to CA.