The Platinum Asset Management Ltd (ASX: PTM) share price will be on watch this morning after the asset manager revealed that its co-founder and controller was offloading a significant number of shares.
According to the release, Mr Kerr Neilson, the co-founder and controller of Platinum Asset Management, has advised of the proposed disposal of shares by way of a fully underwritten offer to institutional and professional investors.
A total of 30 million ordinary shares held by Mr Neilson and 30 million more shares held by Mrs Judith Neilson will be sold via the offer, representing 10% of the company's issued share capital.
The release explains that the sale will be made via an off-market bookbuild at a sale price of $5.00 per share, compared to the last close price of $5.50.
Both Mr and Mrs Neilson will retain a significant number of shares in the company after the sale, giving Mr Neilson voting control over 42.97% of the company's issued share capital.
Mr Neilson explained that the sale will allow the pair to direct some of their capital towards other pursuits.
He said: "We are reducing our interests in the Company that was founded some 25 years ago. The partial disposal of our interests allows us to direct some of our capital towards other pursuits, particularly those that relate to the arts and philanthropy, as well as diversifying our personal investments."
No further share sales will be undertaken during the next 12 months.
Should you be concerned?
I think it is completely understandable why the Neilsons would be offloading shares and would not be concerned if I were a shareholder.
However, due to the discount that the shares are being sold at, I suspect that its share price could come under pressure and wouldn't be surprised to see it slide as low as the offer price if some institutional and professional investors look to make a quick profit.
At that point it could be worth considering a small investment, though I intend to wait for its performance to improve before doing so.
In the meantime, investors may want to check out rivals Magellan Financial Group Ltd (ASX: MFG) Perpetual Limited (ASX: PPT).
