Agree Gents,

A rollercoaster of emotion after first spotting the price spike, then the price-sensitive announcement - and then reading the announcement!

On a brighter note, it's nice to see a trillion-dollar company also think shares were undervalued.... I guess.

My valuation is $1.30 central case, so would have hoped for a premium to this.

However, it looks like the “Cornerstone” investors with around 25% have agreed.

Looks like some shareholders were party to the deal discussion with the Board.

So it looks all but inevitable to me. Value equal to $1.15 in 6 months time!

@AUROPAL you could always buy the 659K units on offer for $1:10 to reduce your average cost base, might even turn a small profit in 6 months time when it goes private for $1:15 :)

Its a shame this one is going private I was thinking VHT was starting to hit its straps, with good management team in place and had a rosy future.

Oh well, time to find the next one!

Bitter sweet for sure. At 7.5x FY24 revenue -- all paid in cash -- it isn't the worst deal, but I agree it is likely seen as good value by the acquirers given the growth potential.

As @mikebrisy said, it seems like a done deal, which presents an interesting arbitrage opportunity given you can buy shares on market for $1.10. That's be an annualised return of about 9%. Still, if the deal fell through, for whatever reason, you could well see a 27%-odd drop if shares returned to the pre-takeover levels. I wont be doing it, but it's interesting.

Given how beaten down the share prices of many small-caps are at present, especially in relation to what the index heavyweights are trading at, I agree we could easily see more takeover offers emerge in the coming months.

I'll be voting against also. I bought back in only recently, seeing the benefits and value Teri promised would happen in 2022, start to materialise.

$1.15 is good value for the buyer to be sure.

And I can't help think Teri wants it bought out also. Its a feather in her cap, considering she took over the company in a much worse state and has turned it around. No easier way to 'move on' without questions then selling the company, vs staying around for the further hard work of continuing growth. I'm probably seeing a shadow where none exists and overlaying an unknown self bias, but I wrote it/thought it all the same.

I don’t think you are seeing a shadow. Maybe it’s more that whilst the sun wasn’t shining, no shadow existed, but as the lights get brighter these shadows can emerge.

I have held this through high and low, so I am by definition a bag holder. Whilst it’s nice to see the pop on this announcement, I would much rather see the investment thesis come to fruition

@Strawman would you name any names you think could be takeover options?

Well, given how some of my holdings are going @TycoonTerry, hopefully one of them!

Seriously though, if any error lies with the execution, and not the product, maybe 3DP (recent board appointment might hint at that...), but also AVA, EVS, ALC.

I'm sure there are lots of others, but these come most easily to mind.

Is that tongue-in-cheek? Do people really put in several thousands of dollars for something like 5%?

You need to tip in $20k even to break into four figures, before tax. And of course, there’s always the possibility of it falling through, however minuscule.

Don’t you need a lot more upside for most ordinary investors to make it worth their while?

You're not slinging 5-figures with your trades @thunderhead? ;)

(Jokes aside, it depends on your brokerage costs. But given the upside, vs the potential downside, it's a not something I'd bother with)

You're right @thunderhead that the risks often outweigh the gains - but these sort of arbs are the sort of thing that Wilson Asset Management's WAA (WAM Active) and WAM (their flagship WAM Capital LIC which is roughly 50% active strategy and 50% research-driven strategy investments) do get involved with - and they don't always even wait the full period - they are happy to take profits when the discount narrows significantly. They even have a LIC (WAR - WAM Strategic Value) among the 8 LICs that they manage that specialises in arb opportunities within their own LIC space but also invests in other arbitrage plays. WAR is managed by Geoff Wilson himself. WAA and WAM have Oscar Oberg as their lead PM (portfolio manager) and they are often in and out of companies within the month, so sometimes they might make large plays and it doesn't even show up in their end of month top 20 list. If they can secure a meaningful position they can often make some money and they don't mind risk because they are playing the odds and they don't expect that every trade will be a winner. Harder when it's your own hard-earned that you're putting at risk though.

Thank you @Bear77 (and hope you're well).

I can understand well-endowed funds getting into the arb game at such thin spreads, as they have the heft of capital to make it worthwhile unlike us mom-and-pops. Even so, unless the potential return is attractive, won't the after tax-returns still be relatively meagre (considering the upside and risk involved?).

Haha @Strawman. I don't tend to (not at the "eff you" money stage yet unfortunately!), and certainly not for a quick "trade" :)

Even if there were no brokerage costs, I can't see it being worth my while unless I commit a big slug of capital (in the order of tens of thousands), and I am guessing most investors won't have the capital base to do that for the meager upside on offer even if the $ return realised from the arb trade is meaningful.

You're right again TH, but Wilson Asset Management NEED to make profits AND to pay tax on them to generate franking credits - exhibit A is WAM not lifting their dividend since 2018 because they have bugger all in their profit reserve, and exhibit B is WAX having to cut their franking percentage back from 100% to 60% on their last dividend because they ran out of franking credits. WAA, the active strategy LIC is still paying 100% fully franked dividends, but they haven't been growing either. Their dividends are stagnant. Horses for courses, but arb strategies that provide taxable short term profits absolutelty suit Wilson Asset Management at this point in time.

And yes, I am reasonably well thanks. Have reduced my full time job to 4 days per week instead of 5 due to my advancing OA which has already caused me to have both my hips replaced and is now playing havoc with my knees and is starting to affect both of my hands as well. This week, today is my day off, it's usually Friday. I estimate I'll be quitting before my nominated retirement age (for superannuation purposes) and claiming TPD. I'm 58 in Feb, but I feel older some days...

How are you going TH? Same line of work? Good health I hope, you're a lot younger than I am!

That makes sense @Bear77, thank you for the explanation. I haven't been following Wilson (or any LIC for that matter) of late, so it does make sense in their particular situation, but perhaps not generally across the board for fundies I presume.

Sorry to hear about your OA @Bear77. Less time spent working will definitely help with the management of the condition. I totally hear you about being a certain age and feeling older! Some days I feel like I am twice my age, especially after becoming a parent :D

I am alright otherwise. My little one keeps me busy outside of the usual humdrum of life. Work is largely the same, though it has been getting worse recently (restructures, layoffs, management turnover etc.). I may have to take a break or change course in 2024 - here's hoping I can summon the required energy, motivation etc. to ring in the big changes!

Taking a good break definitely helps @thunderhead - when I was at Coca-Cola I took almost half of my eleventh year off between long service leave and annual leave, and felt almost ready to go another 10, and then they decided to shut the site down and make us all redundant within the following 12 months, but that turned out to be a blessing really, as a change can be as good as a rest - or can be as refreshing. I'm aware that we're getting off track here with this "VHT Takeover" forum thread, but isn't it nice to not be trolled for doing so, unlike a certain site we both frequented some years ago?

At least here we have the "mute" option, which I have used for a few forums (like Bitcoin) and a few companies, but not yet for any members - coz they're all such fine and polite people here - a wonderful thing! And rare too I find!

I have also fully exited the LIC and LIT space and also no longer have any exposure to managed funds or fund managers TH, however I keep getting drawn back into WAM Watching - possibly the equivalent of Whale Watching in the Australian closed-end fund space - after having attended so many of their roadshows before Covid and having spoken directly with Geoff, Matt, Oscar, Catriona and Kate on multiple occasions (both by phone and in person) and even having a phone conversation that lasted over an hour with Martyn McCathie (who is attached mainly to FGX these days) back when I was recovering in hospital from one of my hip replacements. It's hard to leave that all behind. I remain interested in their challenges and their progress. I do feel that the closed-end fund space in Australia has now waned - sort of "had its day" for now, as evidenced by a number of fund managers - like Forager and Magellan more recently - announcing they are converting closed-end funds into open-end funds that trade at NAV to solve the persistent problem of the discount to NAV in the unit prices of the closed-end funds (LICs and LITs) - see here: ASX LIC discounts: Why some people say it’s closing time for listed investment companies (afr.com) [by Jonathan Shapiro, Senior Reporter, AFR, 09-July-2023]

After a $15b party, it’s hangover time for these funds

Australia’s closed-end market is more than a hundred years old, and activists have come and gone. But this time the situation is a little different, thanks to a new structure of such funds.

--- end of excerpt ---

To read the whole article - please visit: https://www.afr.com/companies/financial-services/after-a-15b-party-it-s-hangover-time-for-these-funds-20230707-p5dmm3

So, yeah, LICs are on the way out methinks, and even Geoff Wilson is now launching an open-ended version of WLE (WAM Leaders) - so I believe he also sees the writing on the wall. It will be interesting to see how much they do pivot in the face of a turning tide against LICs now.

What I find interesting is that they still trade at premium to NAV though.

I got into WMI years back, second year they doubled the dividend, have paid a few special dividends along the way and on average have increased the dividend year on year around 30%. So even thought I’m currently sitting on -.03% paper loss. I’m actually well ahead.

I wish I had sold out of all LICS when they were up. I think at one stage WMI traded near $1.8…. If only I banked that but I was young and foolishly took a set and forget approach to it.

Being free of LICS must be like have all your aches healed at once @Bear77 . You have actually inspired me. I am winding up all exposure to them. Magellan, WMI. Goodbye

@TycoonTerry - I've moved this over to an old WAM thread here: https://strawman.com/forums/topic/7044#post-22776 rather than keep using the VHT Takeover Offer forum thread.