Gabelli Value Plus+ board consults on way forward – the board of Gabelli Value Plus+ has issued a long letter to shareholders, the full text of that letter is here.
In brief, ACG (which is opposed to liquidating the company) has written a letter indicating that (unspecified) litigation concerning the company may be a distinct possibility. The board is asking shareholders for their views which should be submitted before the close of business on Wednesday 14 October. Then the board will put proposals to a general meeting. Three suggestions are:
- A members’ voluntary liquidation (the suggestion rejected by ACG last time)
- A significant return of capital via a tender offer
- A material change to the company’s investment objective and investment policy to reflect realisation of the portfolio and a reinvestment into cash and cash equivalent securities
Our idea about a dividend has been rejected on tax grounds – which we thought was a possibility. A tender offer achieves much the same result – almost all of the cash comes back to shareholders. A large shareholder that doesn’t take up the tender might be forced to make a mandatory bid for the whole company, otherwise there might be a rump trust which would most likely ask shareholders for permission to liquidate once again. On the off chance that a shareholder had made a capital gain, the tender would crystallise it. It seems unlikely that many shareholders would be in that situation, however.
These meetings, the associated legal and adviser fees, and the board time needed to sort out this situation all cost money. We may be getting closer to a resolution, however.
GVP : Gabelli Value Plus+ board consults on way forward