The tender will allow eligible shareholders to sell up to 20% of their individual holdings, with their basic entitlement satisfied in full, subject to shareholder approval at a general meeting on 8 October. In total, LTI could buy back up to four million shares.
The tender price will be struck at a 5% discount to LTI’s prevailing NAV per share at the close of business on 9 October. For the purposes of calculating the price, costs and expenses associated with the tender incurred or accrued ahead of that date will be added back to NAV.
The board said the move was intended to address the discount (currently around 20%) while giving Lindsell Train’s investment strategy more time to recover.
LTI has a strong long-term record, producing an annualised NAV total return of 10.5% since its launch in 2001, against 7.8% for the MSCI World Index. More recently, however, returns have been poor, with NAV losing 7.1% a year over the five years to 31 July 2026. This deterioration in performance has contributed to the widening discount.
Importantly, the tender has been structured so that the remaining portfolio’s proportional exposure to Lindsell Train Limited (LTL), the trust’s investment manager, should not increase. LTL will buy back sufficient shares in itself from the trust to maintain LTI’s percentage exposure to the manager following completion of the tender.
Chair Roger Lambert said the tender would put “choice directly into shareholders’ hands”, providing investors who want to exit with a route to liquidity at a price closely linked to NAV while allowing LTI to continue operating and giving its strategy time to deliver.
The board, Nick Train and Michael Lindsell will not tender any of their own holdings, which the company said reflected their continued confidence in the strategy and its long-term prospects.
The tender closes at 1pm on 9 October, with the result expected on 12 October and completion scheduled for 16 October.
QuotedData’s view
QuotedData’s Richard Williams said: “This looks like a sensible compromise from LTI’s board. A tender at a 5% discount to NAV offers shareholders who have lost patience an opportunity to exit a meaningful portion of their investment at a price likely to be considerably better than could otherwise be achieved while the shares trade on a wide discount. At the same time, it avoids forcing more fundamental change on shareholders who continue to believe in Lindsell Train’s highly concentrated, long-term approach. The treatment of the LTL stake is also sensible, so the proportional exposure in the manager does not balloon as the rest of LTI shrinks through the tender, as too is the decision by Nick Train and Michael Lindsell not to participate. A tender can only do so much, and a sustained narrowing of the discount requires an improvement in investment performance after what has been a very difficult five years for the trust.”
