Diversified United Investment Limited shareholders have overwhelmingly backed the proposed merger with Australian United Investment Company Limited, clearing a significant hurdle toward completion of the transaction. The scheme resolution passed with 96.24% support from DUI shareholders present and voting, and 91.34% of votes cast in favour, demonstrating strong shareholder consensus for the combination.
The next critical milestone arrives on 20 April 2026 when the Federal Court of Australia will hold a second court hearing to consider approval of the scheme. This hearing represents the final regulatory gate the merger must pass. While the strong shareholder vote suggests smooth sailing ahead, the court retains discretionary power to approve or reject the scheme. DUI shareholders maintain the right to appear at the hearing and oppose the merger if they choose, though the high approval rates suggest opposition is unlikely to materially impact the court’s decision.
Under the proposed merger terms, eligible DUI shareholders will receive approximately 0.47241 new AUI shares for each DUI share held. This exchange ratio appears to have satisfied the DUI shareholder base, evidenced by the overwhelming voting margins. The consideration amount represents a fixed share exchange rather than a cash alternative, meaning DUI shareholders will transition directly into AUI ownership upon the scheme’s implementation.
The transaction timeline reveals an expedited path to completion. If the court approves the scheme on 20 April, DUI shares will cease trading on 22 April, while new AUI shares commence deferred settlement trading the same day. The scheme record date falls on 23 April, determining which shareholders receive the new share consideration. Implementation occurs on 30 April, with normal trading in AUI shares resuming on 1 May. This compressed schedule minimizes the period during which DUI shareholders remain in limbo regarding their ultimate investment.
For investors holding either DUI or AUI securities, the merger represents a significant capital structure event. DUI shareholders face immediate transition risk, though the overwhelmingly positive vote suggests the market has already priced in the transaction’s likely completion. AUI shareholders should note that the scheme will dilute existing share ownership through issuance of new shares equal to approximately 0.47241 times the current DUI shareholder base. The financial impact of this dilution depends on the relative valuations and earnings profiles of the two entities at the time of combination.
The merger signals consolidation within the Australian investment company sector, potentially creating a larger combined entity with enhanced scale. The high shareholder support levels indicate that DUI shareholders perceive the combination as value accretive or at least fairly priced relative to their alternatives. Investors should monitor the 20 April court hearing outcome closely, as court approval represents the final confirmation that this transaction will proceed as scheduled. Any unexpected developments at the hearing or regulatory level could alter the implementation timeline, though current momentum strongly favors completion.
View the full ASX announcement (PDF)
About Australian United Investment Company Limited (ASX: AUI)
Australian United Investment Company Limited is a listed investment company that seeks to provide income and capital appreciation to shareholders through a portfolio of securities predominantly comprising shares of companies listed on the ASX. The company invests in the public equity markets of Australia across sectors including banks, financials, healthcare, consumers, infrastructure, transport, mining and energy. Founded in 1953 and based in Melbourne, Australia, it operates as a publicly owned investment manager.
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