Diversified United Investment Limited shareholders are voting today on a proposed merger with Australian United Investment Company Limited under a scheme of arrangement. The vote represents a critical juncture for DUI investors, as approval would see them receive approximately 0.4724 AUI shares for each DUI share held, effectively consolidating two investment vehicles into a single larger entity.
The merger requires multiple layers of approval to proceed. DUI shareholders voting today must back the scheme by more than 50% of those present and voting, with at least 75% of votes cast in favour. Beyond shareholder approval, the Federal Court of Australia must also grant its blessing, along with satisfaction of other conditions outlined in the scheme booklet. This multi-step process underscores the regulatory complexity involved in merging listed investment companies.
The Independent Board Committee of DUI, chaired by Stephen Hiscock and including Andrew Larke, has assessed the proposal and concluded the merger should benefit DUI shareholders. The committee identified three primary advantages. First, the combined entity would offer greater scale and flexibility through a larger investment portfolio. Second, dividend income is expected to increase significantly, with AUI confirming it plans to maintain its current 37-cent annual fully franked dividend per share while paying an additional eight-cent special dividend annually for the next four years. For DUI shareholders receiving AUI shares, this translates to approximately 33% higher annual fully franked dividends.
Cost efficiency represents the third major benefit, with the merged group estimated to save 21% of costs annually, equating to roughly $700,000 per year. These operational savings could translate into either improved returns for shareholders or greater capacity to fund investment activity without proportional cost increases.
The Independent Directors have also examined potential disadvantages and risks associated with the merger, though the announcement does not detail these concerns. Investors reviewing the full scheme booklet will find this analysis in sections 4.2 and 11, information that should factor into their voting decision or investment perspective on the combined entity.
The scheme meeting is being held both in person at Ashurst Australia’s Melbourne offices and online, with voting occurring on 16 April 2026. Results of the shareholder vote will be announced to the ASX shortly after the meeting concludes. Investors seeking further information can contact the shareholder information line on 1300 911 275 between 8.30am and 5.30pm on business days.
The key development to monitor now is the voting outcome and whether shareholders approve the scheme by the required majorities. Should approval be granted, the next hurdle involves Federal Court clearance. The merger, if successful, would reshape the investment profile available to current DUI shareholders through exposure to the larger AUI platform and its dividend commitments.
View the full ASX announcement (PDF)
About Diversified United Investment Limited (ASX: DUI)
Diversified United Investment Limited is an Australia-based listed investment company that invests in Australian equities, listed property trusts, and international equities. The company aims to create a diversified portfolio of quality companies primarily through shares listed on the ASX and international markets, with investment objectives focused on medium to long-term income and capital appreciation. Based in Melbourne, the company was founded in 1991 and provides dividend income to shareholders with the goal of capital appreciation over time.
If you would like to discuss this announcement or how it might affect your portfolio, request a callback or call us on 1300 889 603.
