Why Did Platinum Capital Withdraw Its Scheme and What’s Next?
Platinum Capital Limited has pulled its proposed scheme of arrangement due to insufficient shareholder support but will proceed with an on-market buy-back. Meanwhile, L1 Capital pushes for management control and board renewal.
- Scheme of arrangement with Platinum International Fund Complex ETF withdrawn
- On-market buy-back of up to 20% of shares to proceed on 12 August
- L1 Capital supports buy-back and proposes new management agreement
- L1 Capital requisitions extraordinary meeting to appoint new directors
- Potential board changes if L1 Capital nominees are elected
Scheme Withdrawal Signals Shift
Platinum Capital Limited (ASX – PMC) has officially withdrawn its proposed scheme of arrangement with Platinum International Fund Complex ETF (ASX – PIXX), citing anticipated insufficient shareholder support. The company will seek court approval to cancel the scheme meeting originally scheduled for 12 August 2025. This move reflects a strategic pivot after L1 Capital and its associates indicated their intention to vote against the scheme, making the 75% approval threshold unlikely to be met.
Buy-Back to Provide Liquidity
Despite the scheme’s withdrawal, the general meeting on 12 August will proceed to consider an on-market buy-back of up to 20% of the company’s shares. The buy-back resolution has garnered support from L1 Capital, which holds approximately 17% of shares and has confirmed it will vote in favor. The board unanimously recommends shareholders approve the buy-back, which aims to offer liquidity to investors seeking to exit closer to net tangible asset value.
L1 Capital’s Management and Board Ambitions
Adding complexity to the situation, L1 Capital has submitted a non-binding indicative proposal to terminate the existing management agreement with Platinum and replace it with a new agreement under which L1 Capital would manage the investment portfolio. Their proposed strategy is a Global Long Short approach, similar to that employed in their L1 Long Short Fund but without geographic restrictions. This proposal accompanies a requisition for an extraordinary general meeting to appoint three new directors nominated by L1 Capital.
Potential Board Renewal and Governance Changes
If L1 Capital’s nominees; Rachel Grimes, David Gray, and Douglas Farrell; are elected, current directors Margaret Towers and Ian Hunter intend to resign, while Joanne Jefferies is expected to remain with L1 Capital’s support. The board will evaluate L1 Capital’s proposal post-election, but any management change would require shareholder approval. This unfolding governance contest marks a critical juncture for Platinum Capital’s strategic direction and leadership.
Looking Ahead
Shareholders face a pivotal decision at the upcoming meetings, balancing the immediate liquidity offered by the buy-back against the longer-term implications of a potential management overhaul. The board’s recommendation to support the buy-back contrasts with L1 Capital’s broader ambitions, setting the stage for a contested governance battle. Market participants will be watching closely as Platinum Capital navigates this uncertain chapter.
Bottom Line?
Platinum Capital’s next moves hinge on shareholder votes that could reshape its management and investment strategy.
Questions in the middle?
- Will shareholders endorse L1 Capital’s nominees and their management proposal?
- How might the Global Long Short strategy impact Platinum Capital’s portfolio performance?
- What are the implications for share price and investor confidence amid this governance tussle?
