Ozgrowth : WAM Capital and Ozgrowth set to merge

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WAM Capital and Ozgrowth set to merge	23 December 2021
	ASX announcement

WAM Capital Limited (WAM Capital) (ASX: WAM) and Ozgrowth Limited (Ozgrowth) (ASX: OZG) are pleased to announce that they have entered into a Scheme Implementation Agreement (annexed to this announcement) to merge the two entities (Proposed Transaction).

Under the Proposed Transaction, WAM Capital will acquire 100% of the shares in Ozgrowth that it does not currently own through a scheme of arrangement (Scheme). Under the Scheme, Ozgrowth shareholders will receive new WAM Capital shares as consideration for their Ozgrowth shares. The number of WAM Capital shares to be offered for each Ozgrowth share will be determined by a formula based on the ratio of the share price of WAM Capital to the net tangible assets (NTA) of Ozgrowth before tax (pre-taxNTA). Using the share price of WAM Capital and the pre-tax NTA of Ozgrowth at 30 November 2021 as an example1, Ozgrowth shareholders would receive 0.168 new WAM Capital shares for each Ozgrowth share they hold under the Proposed Transaction, with an indicative market value of $0.372 per Ozgrowth share, representing a 32.8% uplift over the closing price of Ozgrowth on that day.

It is the intention of the WAM Capital Board of Directors to ensure that all Ozgrowth shareholders receiving WAM Capital shares issued under the Scheme will be eligible to receive the WAM Capital FY2022 fully franked interim dividend. A condition of the Proposed Transaction is that Ozgrowth will not pay an interim dividend and consequently the dividend target for Ozgrowth is withdrawn.

WAM Capital has today announced a similar transaction involving Westoz Investment Company Limited (ASX: WIC). The Proposed Transaction is independent of that transaction and the two transactions are not inter-conditional. The Proposed Transaction will proceed whether or not the transaction between WAM Capital and Westoz Investment Company Limited proceeds and vice versa.

WAM Capital Chairman Geoff Wilson AO said: "The WAM Capital Board of Directors believe the merged entity under the Scheme will provide both Ozgrowth and WAM Capital shareholders with appealing benefits. We look forward to welcoming Ozgrowth shareholders to the Wilson Asset Management family."

Ozgrowth Board's Recommendation

Subject to the independent expert determining that the Proposed Transaction is in the best interests of Ozgrowth shareholders, and in the absence of a superior proposal, the Ozgrowth Board of Directors believe the Proposed Transaction is in the best Interests of Ozgrowth shareholders and intend to vote their own Ozgrowth shares in favour of the Proposed Transaction.

Ozgrowth Chairman Jay Hughes said: "We believe the Proposed Transaction offers our investors the opportunity to better realise the underlying value in their holdings, with WAM Capital shares offering greater liquidity and closer alignment to the underlying asset value in a vehicle that has a similarly successful investment track record to Ozgrowth".

1 Based on WAM Capital's closing share price of $2.22 per share, Ozgrowth's pre-tax NTA of $0.346 per share and Ozgrowth's closing share price of $0.28 per share on 30 November 2021. The implied value of the Offer depends on the value of WAM Capital's share price and the Ozgrowth pre-tax NTA at the Calculation Date and the WAM Capital share price at the time the Scheme consideration is issued (on the Implementation Date), and could be higher or lower than the example used.

WAM Capital Limited	Ozgrowth Limited	Page 1 of 4
ABN 34 086 587 395	ABN 52 126 450 271

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Key benefits of the Proposed Transaction

The Proposed Transaction offers substantial benefits for Ozgrowth shareholders including:

• the ability to exit their investment in Ozgrowth at premium to the stated pre-tax NTA backing of the company and a premium to the share price of Ozgrowth;
• Wilson Asset Management's investment expertise and experience;
• Wilson Asset Management's commitment to shareholder engagement;
• WAM Capital's track record of investment portfolio performance; and
• WAM Capital's greater market capitalisation and on-market liquidity.

If the Proposed Transaction proceeds, it will create a single listed investment company with a larger capital and shareholder base. The merged entity will have:

• stable and clearly articulated investment strategy and a proven investment manager with a track record of providing investment portfolio performance for shareholders since inception in August 1999;
• the removal of duplication of expenses such as ASX listing fees, share registry fees, audit fees, compliance costs and other public listed company costs, as well as a larger pool of assets to spread the expenses across;
• a share price which has historically traded at a premium to the company's pre-tax NTA; and
• a pre-tax NTA of approximately $1,801.6 million (based on the reported 30 November 2021 NTAs of WAM Capital and Ozgrowth) and approximately 44,000 shareholders.

Scheme Consideration and Conditions Precedent

As consideration for their Ozgrowth shares under the Scheme, Ozgrowth shareholders will receive new WAM Capital shares as consideration for their Ozgrowth shares. The number of WAM Capital shares to be offered for each Ozgrowth share will be determined by a formula, based on the ratio of the volume weighted average share price of WAM Capital on the calculation date and a 7.5% premium to the pre-tax NTA of Ozgrowth. The indicative calculation date for this ratio is 31 March 2022, subject to any adjustments required by ASIC or ASX. It is a condition precedent that at the calculation date, the Ozgrowth pre-tax NTA has not fallen more than 10% compared to the Ozgrowth pre-tax NTA most recently announced on the ASX prior to the date of this announcement and the WAM Capital share price premium to NTA remaining between 12.5% and 25.0%.

Scheme Implementation Agreement and indicative timeline

WAM Capital and Ozgrowth have entered into the attached Scheme Implementation Agreement, which contains the terms and conditions on which WAM Capital and Ozgrowth will implement the Proposed Transaction. The Scheme Implementation Agreement includes a number of customary clauses and is subject to conditions precedent including Ozgrowth shareholders approving the Scheme, the independent expert concluding that the Proposed Transaction is in the best Interests of Ozgrowth shareholders and the Supreme Court of Western Australia approving the Scheme.

It is currently anticipated that Ozgrowth shareholders will be given the opportunity to vote on the Scheme at a meeting expected to be held on 4 April 2022. Detailed information relating to the Scheme will be set out in the Scheme Booklet, which is expected to be sent to Ozgrowth shareholders by the end of March 2022.

WAM Capital Limited	Ozgrowth Limited	Page 2 of 4
ABN 34 086 587 395	ABN 52 126 450 271

For personal use only

An indicative timetable for the Proposed Transaction is set out below:

Event	Expected date
First Court date	28 February 2022
Scheme Booklet sent to Ozgrowth shareholders	By 4 March 2022
Calculation date for exchange ratio	31 March 2022
Scheme Meeting	4 April 2022
Second Court date	8 April 2022
Effective date	11 April 2022
Record date	13 April 2022
Implementation date	21 April 2022

The indicative timetable is subject to finalisation and review with the ASX and ASIC.

Contact details and advisors

Ozgrowth is being advised by Steinepreis Paganin as legal adviser. For further information, please contact [e-mail].

WAM Capital is being advised by Mills Oakley as legal adviser.

Chief Financial Officer & Company Secretary	Senior Corporate Affairs Advisor
Jesse Hamilton	Olivia Harris
T: [phone]	T: [phone]
E: [e-mail]	E:[e-mail]

This announcement has been authorised by the boards of WAM Capital Limited and Ozgrowth Limited.

About Ozgrowth Limited

Ozgrowth Limited (ASX: OZG) is a listed investment company based in Perth. The Company's objective is to generate a positive return over the medium to long-term, regardless of the movements of the broader share market, from an actively managed portfolio of small cap ASX listed and unlisted investments, and provide shareholders with a consistent stream of dividends.

Since inception in 2008 when an initial $80 million was raised, the portfolio has generated a return before fees and taxes of 12.2% per annum (6.7% per annum above the S&P/ASX All Ordinaries Accumulation Index) and paid $44 million in fully franked dividends to shareholders. The Company's portfolio is managed by Westoz Funds Management Pty Ltd (AFSL 285607), a 100% owned subsidiary of Euroz Hartleys Group Limited.

WAM Capital Limited	Ozgrowth Limited	Page 3 of 4
ABN 34 086 587 395	ABN 52 126 450 271

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About WAM Capital

WAM Capital Limited (ASX: WAM) is a listed investment company (LIC) managed by Wilson Asset Management. Listed in August 1999, WAM Capital provides investors with exposure to an actively managed, diversified portfolio of undervalued growth companies listed on the ASX, with a focus on small- to-medium sized businesses. The Company's investment objectives are to deliver a stream of fully franked dividends, provide capital growth and preserve capital.

All major platforms provide access to WAM Capital, including AMP North, BT Panorama, Colonial First State FirstWrap, Netwealth, Macquarie Wrap, Powerwrap and Hub24. WAM Capital receives coverage from the following independent investment research providers:

About Wilson Asset Management

Wilson Asset Management has a track record of making a difference for shareholders and the community for more than 20 years. As the investment manager for eight leading LICs: WAM Capital, WAM Leaders (ASX: WLE), WAM Global (ASX: WGB), WAM Microcap (ASX: WMI), WAM Alternative Assets (ASX: WMA), WAM Strategic Value (ASX: WAR), WAM Research (ASX: WAX) and WAM Active (ASX: WAA), Wilson Asset Management invests over $5.4 billion on behalf of more than 120,000 retail investors.

Wilson Asset Management created and is the lead supporter of the first LICs to deliver both investment and social returns: Future Generation Australia (ASX: FGX) and Future Generation Global (ASX: FGG). Wilson Asset Management advocates and acts for retail investors, is a member of the global philanthropic Pledge 1% movement, is a significant funder of many Australian charities and provides all team members with $10,000 each year to donate to charities of their choice. All philanthropic investments are made by the Investment Manager.

For further information, visit wilsonassetmanagement.com.auor contact:

Geoff Wilson AO	Kate Thorley	Jesse Hamilton	Martyn McCathie
Chairman &	Chief Executive Officer	Chief Financial Officer	Head of Operations and Key
Chief Investment Officer	[phone]	[phone]	Account Manager
[phone]	0405 115 644	0401 944 807	[phone]
			0433 312 603

WAM Capital Limited	Ozgrowth Limited	Page 4 of 4
ABN 34 086 587 395	ABN 52 126 450 271

For personal use only

Scheme

Implementation

Agreement

BETWEEN

WAM Capital Limited (ACN 086 587 395) (WAM

Capital)

AND

Ozgrowth Limited (ACN 126 450 271) (Ozgrowth)

MILLS OAKLEY

Level 7, 151 Clarence Street SYDNEY NSW 2000 Telephone: [phone] Facsimile: [phone]

DX 13025, SYDNEY MARKET STREET www.millsoakley.com.au

Ref: LYRS/3548471