Tuesday, July 5, 2016

Fondul Proprietatea resumes public tender offer

Link:

As such, the Investment Manager would like to inform shareholders that it has submitted today for approval to the Financial Supervisory Authority (the “FSA”) an application for a tender offer for cash of its own shares in relation to the sixth buy-back programme approved by the Shareholders’ Resolution no. 5/27 April 2015. The Investment Manager would also like to inform shareholders and investors that it has engaged Wood & Company Financial Services, A.S. as intermediary in relation to the purchase of shares and intends to engage Goldman Sachs International and Wood & Company Financial Services, A.S. as dealer managers and The Bank of New York Mellon as tender agent in relation to the purchase of global depositary receipts (“GDRs”). Under this tender offer, the Fund intends to repurchase up to 575,000,000 shares (both in the form of shares and GDRs) from its shareholders. It is expected that full details of the tender offer, including pricing, will be announced if and when approval is received from the FSA, which is expected to occur within 10 business days according to the regulations in force.

At the beginning of the year the fund was going to do a tender for a large portion of the outstanding shares. It got shelved and the buyout program continued. The buyout has been suspended and the tender is back on and we should see details in 10 days. I suspect with the discount to NAV at 30% and a mandate to close the gap we could see a big offer. 

The fund announced their arrangement of a big credit facility and the sale of two of its largest holdings. I suspect that those funds will be earmarked for the tender offer. 

Nevertheless we could see a nice payout after a year holding period. 


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