I think the premium is (a) to ensure this goes through - being a control premium, and (2) to look after their mates at MLT - because there are a lot of overlapping interests and shareholders common to both companies. Because of the larger than 10% NAV premium that SOL is trading at and because they're using SOL shares to pay for MLT, not cash, SOL can afford the 10% premium easily. It does set a new bar for LIC takeovers however. You could be right about them borrowing money against the MLT portfolio, or they could be planning to liquidate some of those assets and invest the money elsewhere. I have not dug into it that deeply, and don't know if their intentions have been spelled out to that extent at this point. I would however point out that when SOL used Pengana Capital to takeover HHV - the Hunter Hall Global Value Fund - and also Hunter Hall International (the manager), after Peter Hall shocked the investment community by selling out to SOL and walking away from public funds management altogether, the SOL-controlled Pengana (PCG) sold all but one of the positions within HHV - renamed it PIA (Pengana International Equities) and it very soon bore zero resemblance to what Peter Hall used to hold in HHV. This was not long after Trump won the US Presidential election a few years back and gold did not rise as Peter Hall had expected, so his portfolio positioning seemed very poor in hindsight. After PCG sold those gold miner positions (including SAR - which has now merged with NST), all of them did actually rally significantly, eventually peaking in late 2020, for now. PIA have NOT done well since, with their post-tax NTA being lower than their pre-tax NTA, suggesting they have more capital losses (tax losses) than capital gains on their books, and both of their NTA's are around 12 to 16 cents above their share price, which is actually not too unusual for globally focussed LICs here in Australia - most are trading at discounts to NTA. However, 5 years ago, PIA were trading at higher levels (as HHV) than where they are trading today, so it has NOT been a positive experience for holders of HHV shares who did not sell and now still own PIA shares. All that is to say that I would not put it past SOL to make some big changes to the MLT portfolio once they gain control. They have the track record of doing just that. And that is possibly why they need to pay a premium to NTA to ensure this deal goes through.