DUI Shareholders Approve Merger with AUI, Eyeing Dividend Growth

Strong Shareholder Support at Scheme Meeting

Diversified United Investment Limited (ASX:DUI) shareholders delivered a decisive thumbs-up to the proposed merger with Australian United Investment Company Limited (ASX:AUI) at the Scheme Meeting held on 16 April 2026. Proxy and direct votes showed nearly 90% in favour, comfortably exceeding the 75% threshold required for the scheme of arrangement to proceed. This outcome follows the finalisation of the exchange ratio at approximately 0.4724 AUI shares per DUI share, a detail confirmed just days earlier, reinforcing investor confidence in the terms of the deal.

Dividend Boost and Cost Savings Highlighted

The merger is pitched as a strategic move to create a larger, more flexible investment portfolio. According to DUI’s Independent Directors, shareholders can anticipate a roughly 33% increase in fully franked dividends post-merger, with AUI committing to maintain its current 37 cents per share annual dividend and pay special dividends of eight cents per share for the next four years. Additionally, the combined entity expects to achieve cost savings of about 21%, translating to $700,000 annually. These financial incentives are central to the Independent Directors’ unanimous recommendation to vote in favour of the scheme.

Independent Expert and Largest Shareholder Endorsement

Adding weight to the merger's appeal, Kroll Australia’s independent expert report affirmed the scheme as fair and reasonable, concluding it is in the best interests of DUI shareholders, barring any superior proposal. The largest shareholder, The Ian Potter Foundation, also voiced strong support, committing to vote in favour unless a better offer emerges. This backing from both an expert and a major stakeholder helped quell concerns about potential risks, such as reduced exposure to international equities or tax implications for shareholders.

Next Steps and Timetable for Completion

With shareholder approval secured, the merger now awaits Federal Court approval, scheduled for 20 April 2026. If granted, the scheme will become effective on 21 April, with DUI shares suspended from trading that day. Eligible shareholders on the register at 7pm on 23 April will receive new AUI shares on 30 April, which will begin normal trading on 1 May. This timeline offers a clear roadmap for investors to monitor the transition and the subsequent performance of the merged entity.

This development builds on the earlier exchange ratio finalisation that set the financial terms of the merger, providing a crucial foundation for the shareholder vote and the forthcoming court approval process.