Oversubscribed with 85.1% electing to tender
Kathleen Gallagher, Investment Week, 19 October 2021
In a stock exchange announcement today (19th October) the board trust said the 25% tender offer at a 2% discount to NAV was oversubscribed with £103.3m, representing 85.1% of shares in issue electing to tender.
Fidelity Investment Management recently took over the management of the company from Genesis Investment Management.
“Huge take-up for Fidelity Emerging tender spells trouble,” said James Carthew, head of investment company research at QuotedData. “The size of the vote against this decision was one indication that shareholders were uneasy. However, now we have decisive evidence of that.”
During the Emergency General Meeting, at the beginning of the month, shareholders voted in favour of Fidelity and its new investment portfolio. However, 96.7% voted in favour of the new company name and 95.6% voting in favour of a tender offer, only 72.3% voted in favour of the change of objective and investment policy.
Numis said given the level of votes against the change of investment “significant level of redemptions may have been expected”.
Tendering shareholders will receive 3.5% of the amount tendered in excess of the 25% basic entitlement. This means a shareholder who tendered their entire holding will have about 27.6% returned, according to the broker.
“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,” Carthew said.
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