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Milton Corporation Ltd

MLT is the third largest LIC on the ASX with a market cap of over $4 billion. It offers investors
access to a portfolio of ASX-listed securities and other investments at low cost, with a
management fee of just 0.14%. The company has a multi-decade history with a highly
experienced board and a proven, well established investment process. While the portfolio
will vary from the performance of the benchmark index (ASX All Ordinaries Accumulation
Index) over shorter periods, over the long-term the portfolio has performed largely in line
with the market. Up until the disruptions in 2020, the Company had a history of achieving its
goal of providing a growing dividend stream over time. As a result of a reduction in dividends
in the portfolio throughout 2020, the Board took the position to cut the final FY20 dividend
and the subsequent interim divided. On 23 July, the Company declared a final dividend for
FY21 of 8 cents per share, fully franked. This compares to the final dividend of 8.5 cents per
share in FY20. On 22 June 2021, the Company announced it had entered into a Scheme
Implementation Arrangement with Washington H. Soul Pattinson (ASX: SOL) under which
SOL will acquire 100% of the MLT shares that it does not already own. The offer involves
SOL acquiring the MLT shares at a 10% premium to the pre-tax NTA, adjusted for dividends,
at the calculation date. At the time of the announcement the offer represented $6.00 per
MLT share. See Proposed Merger Section below for details regarding the proposal as well as
considerations for MLT shareholders. The Company was trading at a significant premium as
at 30 June 2021 on the back of the announcement of the merger proposal, given the value
of the proposal implied a value above the share price prior to the announcement. A Scheme
Booklet is expected to be distributed in August with further information.