Since the ASX announcement enabling shareholders to acquire up to $30,000 worth of WMI shares @ $1.455 which was the estimated NTA, the share price has fallen about 5 cents.
As I see it, the main reason for the fall is shareholders are selling a portion of their shares with the intention of taking up the offer to buy @ $1.455.
When the offer closes, expect the share price to rebound to a level that is historically about 10 cents under the price of WAM Capital. Looking to the longer term, WMI is likely to increase future dividends at a faster rate than WAM. Indeed, WAM may not increase their dividend in the near term.
Depending on the WMI offer take-up, only long-term & large volume shareholders may get the full $30,000 worth of shares from the share purchase plan.
Consequently, the share price should almost certainly rise after the offer closes to make the take-up @ $1.455 worthwhile.
WMI Price at posting:
$1.48 Sentiment: Buy Disclosure: Held
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