Third Point looks to tackle discount – Third Point Investors Limited says that, following a detailed strategic review in close partnership with the investment manager, the board is announcing several changes aimed at enhancing the strength of the company.
The changes seek both to build on the manager’s track record and address the persistent discount to NAV.
The changes include:
- The introduction of a discount control mechanism that will set a long-term target discount level of no more than 7.5% and buy-backs to move the discount towards this target;
- An implementation of two discount-triggered tender offers for 25% of NAV, at a discount of 2% to NAV. These will happen, if in the six-month periods ending 31 March 2024 and 31 March 2027, the average discount is more than 10% (for 2024) and 7.5% (for 2027);
- The company will elect to receive an increased allocation to venture capital and private equity investment opportunities in the underlying Master Fund but only up to 20% of NAV;
- There is a new intention to employ gearing using a revolving credit facility. This will not exceed 15% of NAV and is intended to facilitate an ability to increase exposure at times of increased opportunity; and
- In addition, the board and the manager are exploring the creation of an exchange mechanism, pursuant to which qualified investors would be permitted to convert shares of the company for up to an aggregate of $50m of interests in the Master Fund. The creation of such facility is subject to regulatory and legal considerations and, ultimately, shareholder approval.
TPOU : Third Point looks to tackle discount