Investors in the Henderson Value Trust are set to get an opportunity to redeem some of their shares at a premium to their current price.
The board of the trust has announced a tender offer which will see the trust buy back shares from investors at a higher price than they would fetch on the open market.
The trust’s shares are on a discount of 13.6 per cent compared to the value of the trust’s assets at present.
The board is offering to buy up to 10 per cent of the outstanding shares at a 2 per cent discount, less costs and the procedure for tendering the shares. This means each shareholder will be able to sell to the board 10 per cent of their investment in the trust.
Investors were buoyed last year when the board passed management of the trust from SVM Asset Management to Henderson Global Investors, however, the turnaround in the trust’s performance has taken longer than some had hoped.
Manager Ian Barrass has written in updates about the challenges within the portfolio, including several illiquid holdings.
The board also this month had to respond to reports about a disagreement which led to its chairman Shane Ross resigning.
In a statement to markets earlier this month, the board said it thought it was “regrettable” Mr Ross had briefed the Sunday Telegraph about the board’s “difference of opinion”.
Mr Ross claims in the Sunday paper that parts of his chairman’s statement was deleted prior to publication and that this could impact shareholders’ opinion as to whether to keep the trust going at its next continuation vote.
Investment trusts usually have written into their prospectuses that a continuation vote - which dictates if the trust continues or winds up - takes place on a recurring basis.
Deciding to wind the trust up and sell its assets could be beneficial for investors if the trust’s shares are trading at a wide discount compared to the net value of the trust’s assets.
This latest move by the board could be aimed at appeasing investors with the offer of some of their money back at better levels than in the market.
The tender offer will be put to a vote at the annual general meeting on December 19 and if successful, payments are likely to be made in January.
