Antipodes Global Investment Company (APL) has announced plans for a conditional tender offer (CTO) programme to address the share price discount to net tangible assets (NTA).
This would enable APL’s shareholders to tender shares for sale to the company via off-market buybacks at three-year intervals if the share price trades at an average discount to NTA of more than 7.5%.
This was the first time an Australian listed investment company had used this method but it had been used by strategies in the UK and proven successful.
The CTO, which was subject to shareholder and regulatory approval, would open following the five-year anniversary of APL on 18 October, 2021.
It will be subject to the Company’s closing share price exceeding a 7.5% discount to pre-tax NTA for that same day, on a daily average basis over a 12-month period prior the CTO.
The tender offer price will be NTA less 2% as calculated on or around the closure of the CTO offer period. The maximum number of shares the Company can buy-back will be 25% of shares on issue at that time.
Jonathan Trollip, chairman of the board, said: “The APL board has listened intently to shareholders with various views and researched best practice discount management techniques used in LICs in other markets. This has led us to a decisive course of action that balances the interests of long-term shareholders who want to stay with the Company and those who wish to exit near NTA.
“While persistent LIC NTA discounts is an industry-wide issue, this innovative strategy will give current and prospective shareholders the confidence that the Company’s share price will better reflect NTA and thus the performance of the Company’s portfolio.