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Barings Emerging welches on 25% tender offer

Barings Emerging EMEA Opportunities (BEMO) has taken the controversial decision not to proceed with a conditional 25% tender offer that it committed to five years ago, saying to buy back up to a quarter of its shares would significantly reduce the size of the £94m fund, worsen liquidity in the stock and push up its cost ratio.

Although the company passed the performance test it set itself in October 2020, beating its benchmark by 1.4% a year on average, its shares have traded at an average 16.8% below net asset value, wider than the 12% discount level set as a trigger for the tender offer.

Having consulted with shareholders, the investment trust’s board now proposes to hold an annual continuation vote and a 100% tender offer in 2028 if it does not outperform in the next three years. If the forthcoming continuation vote fails, the company will wind up.

Shares that have rallied 26% this year dipped 0.8% to 795.9p.

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QD News
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