Ann: BKI Announces Entitlement Offer and General Offer, page-52

The acquisition of unlisted investment companies is more often used by the somewhat similar Milton LIC (MLT).

The technique of acquisition of these unlisted companies gives the LIC the stocks of the old unlisted company at face value and the LIC issues LIC shares to the previous unit holders at face value.

Possible advantages to the old unlisted trust unit holders are a more simple investment going ahead and self management. Also, a possible advantage may be that the previous unlisted trust owners receive CGT relief on the transaction.

Advantages for the LIC and it’s shareholders is that the LIC grows it’s market capitalisation. And most of all it grows it’s market capitalisation without discounting / diluting.

In my opinion the acquisition of unlisted companies is not a bad trick.