Augmentum Fintech, the struggling financials investment trust, has accepted a cash bid from Frontier BidCo, a new company controlled by Norwegian firm Verdane, the firms announced this morning.
BidCo will acquire the trust for 111p per share, totalling a £185.7m buyout for the entire issued share capital.
The Augmentum board unanimously plans to accept the acquisition and said the terms were “fair and reasonable”, according to today’s RNS.
The trust has been a persistent underperformer in recent years, losing investors’ money over the past one, three and five years, according to data from FE Analytics. Share prices peaked in September 2021 at 171p, but have since slid to 87.4p, according to QuotedData.
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William Reeve, chair of Augmentum, said: “Over several years, we have faced a persistent and widening discount to net asset value (NAV), compounded by low levels of liquidity”.
The chair added: “This has made it difficult for shareholders to realise the true value of their holdings or for Augmentum to raise the capital necessary to support our ambitions.”
The offer provides an “immediate solution”, he said, offering full liquidity at a 27% premium to the current share price and offering value to shareholders.
The acquisition is conditional on shareholder approval and is expected to be completed in the second quarter of 2026.
However, for James Carthew, head of investment companies at QuotedData, this is a bitter pill to swallow.
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“How do we get to a situation where a board is happy to recommend a bid at more than a 30% discount to NAV (in monetary terms, giving up £81m out of a NAV of £267m)?”
The analyst continued: “If the NAV is correct, shareholders should not let Augmentum go so cheaply and I hope this flushes out a counteroffer from another party.”
If the board is selling because it feels the NAV is overstated, then it “should revalue the portfolio” to ensure investors have all the information possible to make their decision, Carthew said.
