Huge take-up for Fidelity Emerging tender spells trouble – As we have discussed previously, Fidelity Emerging Markets offered investors a 25% tender offer in conjunction with the move of the manager from Genesis to Fidelity. The size of the vote against this decision was one indication that shareholders were uneasy. However, now we have decisive evidence of that.
In the event, 103,326,957 shares were validly tendered – that is 85% of all shares in issue. Given that there is always some inertia in share registers, that is a massive vote of no confidence in the trust.
The maximum number of shares in respect of which tenders will be satisfied is 30,366,688. The implication is that there are holders of 70m more shares that would sell if given the opportunity.
There is no statement from the board on this, but at the very least we think shareholders should be offered a continuation vote based on this result.
FEML : Huge take-up for Fidelity Emerging tender spells trouble