Surprise oversubscribe for BG European tender – As part of the process of taking on the management of European Investment Trust, Baillie Gifford agreed to hold a tender to allow shareholders that did not want to remain in the trust an exit. In the event 21,528,812 ordinary shares, approximately 53.5% of the issued share capital, were validly tendered. However, the tender was just for 10% of the trust’s shares. As a result, the tender offer was oversubscribed and tenders will be scaled back.
The NAV as at the close of business on 30 January 2020 was 938.3844 pence per share. Accordingly, the tender price is 915.0414 pence per share.
4,024,436 shares will therefore be purchased by Peel Hunt on 5 February 2020 for a total cost of approximately £36.8m. Peel Hunt will try to sell these but can put them back to the company for repurchase – they would then be held in treasury.
Any money due under the tender offer will be paid out on 5 February 2020.
[Baillie Gifford’s managers have been hard at work trying to persuade investors to stick with the trust in its new guise. The trust is trading at a small premium to asset value which must have given them hope that they were winning that argument. For over half the trust to be tendered must be a surprise therefore. We’ll see what happens now – either investors will try to take advantage of the premium – they can try to sell in the market now for something close to 946p, much more than they could have got under the tender, in which case the shares will probably move to a discount – or petition the board for a bigger tender at a price closer to asset value.]
BGEU : Surprise oversubscribe for BG European tender