On August 30, 2011 closed end fund The Greater China Fund (NYSE: GCH) announced that it would double the size of its original tender offer plan. From the press release:
The original program provided for up to two, consecutive, issuer tender offers, each for up to 5% of the Fund’s outstanding shares and provided that a tender offer would be made only if the average discount to the Fund’s net asset value per share (“NAV”) of the per share trading price of the Fund’s shares on the NYSE was greater than 10% during the applicable measurement period, with the first period commencing on July 1, 2011 and being scheduled to end on September 16, 2011.
Under the program as amended, the Fund will commence a one-time issuer tender offer for up to 20% of the Fund’s outstanding shares at a price per share equal to 98% of the Fund’s NAV, as determined by the Fund on the next business day following the expiration date of the tender offer. The amendment is in response to market conditions and concerns about the size and timing of the program.
This CEF is a holding in three of Covestor manager Dan Plettner’s model portfolios as of 9/2/11: Well-Intentioned Activism, Long/Short Opportunistic and Core. Click through any of them for more details on the portfolio.
In a June 21, 2011 article for DealFlow media’s Closed End Fund alert, Pletter commented on the CEF:
Greater China Fund is among the most attractive activism theses in the closed-end fund landscape. And if Greater China Fund shares continue to be accumulated by savvy investors, the voting contingent may become increasingly focused on a liquidity event. The board appears to be losing its ability to avoid the fund’s full liquidation with merely a significant tender long before its 2012 annual meeting.
Sources:
“The Greater China Fund, Inc Announces Increase in Tender Offer Program” Company press release, 8/30/11
“Does Greater China Fund’s Board Know It Is Choosing Liquidation?” Dan Plettner, DealFlow Media, June 21, 2011 http://www.dealflow.com/alerts/closedendfund/wires/article.cfm?title=Does-Greater-China-Funds-Board-Know-Is-Choosing-Liquidation&id=geceaadcogfskmp
