Shares in Ocean Wilsons Holdings Limited (LSE:OCN) fell 9% in early trading on Monday after it agreed to an all-share merger with Hansa Investment Company, in a deal that aims to create a £900 million investment group with a mix of public and private assets.
The two firms, which already share investment management via the Beckwith-backed Hansa Capital Partners, said the tie-up would result in a larger and more cost-efficient platform, with overlapping portfolios and a simplified structure.
Under the terms, Ocean Wilsons shareholders will receive 1.4925 new Hansa share units, comprising one voting and two non-voting shares, for each Ocean Wilsons share.
That exchange ratio is based on each company’s net asset value per share, with Ocean Wilsons pegged at £20.16 and Hansa at £13.51.
Once completed, existing Ocean Wilsons shareholders will own about 41.4% of the combined group, with Hansa investors holding the rest.
While both boards backed the transaction, Monday’s sharp share price reaction suggests investors were underwhelmed by the terms.
Ocean Wilsons is best known for its majority stake in Brazilian port operator Wilson Sons, and its investment portfolio has historically traded at a deep discount to asset value.
The boards pitched the deal as an opportunity to scale up, cut costs and lower fees.
They said the merged vehicle would benefit from a tiered fee structure and a more competitive charges ratio, a measure of the annual cost of managing the fund.
The merger follows a review of Ocean Wilsons’ strategic options announced in June, with shareholders pushing for a clearer path to unlocking value in its investment arm.
In early trading, the stock was off 119.26p at 1,340.74p.