Herald Corporate Action - Tender Offer

homestraight

Hi all

Couldn't find an existing thread. I currently hold Herald Investment trust and received notification of this. 

I didn't know about the background to it but have done some reading. Sounds interesting and it's a defence against Saba Capital Management.

Would appreciate any thoughts and what one might do in terms of taking up the offer or not. 

Thanks
HS

masonic

Explained here: https://www.theaic.co.uk/aic/news/industry-news/herald-launches-100-tender-to-see-off-saba

It doesn't look like there is much point in participating in this stage if it is contingent on Saba taking it up and they've indicated they won't. The next tender will give you an exit opportunity should Saba not be flushed in the first.

Rollinghome

I've never owned Herald, but only because I've always had enough tech, and Katie Potts has been an excellent and admired manager. 

Nor have I looked at the tender details as yet, but I would probably go for it.  The discount is currently 7.3% but has been as wide as 20% not long ago, the formidable Ms Potts isn't getting any younger, and I wouldn't want to invest in anything run by the SABA vulture.  Weinstein will have already done enough damage.  But obviously need to read all the details available.

homestraight

Herald has done well for me to date and I'd want to continue to hold it longer term. Could do without the shenanigans but it's the nature of the beast. Will do some more reading. 
Thanks for the link masonic

the_seer

Normally, investment trust tenders at or close to NAV are a no brainer, but the main issue with this one is that there is a 3.5 month gap between tendering shares and getting the cash. 

A lot could happen to the SP (and NAV) in that time, and there's no backing out once committed.

homestraight

masonic said:

Explained here: https://www.theaic.co.uk/aic/news/industry-news/herald-launches-100-tender-to-see-off-saba

It doesn't look like there is much point in participating in this stage if it is contingent on Saba taking it up and they've indicated they won't. The next tender will give you an exit opportunity should Saba not be flushed in the first.

Does anyone have any recommendations of trusts or funds to research in the global smaller companies sector which are mentioned in this article as performing better than Herald. I'm interested to do some reading. 

Thanks

green_man

Yeh a bit disappointing to me this.  Herald fulfils a particular balance in my portfolio and I have done ok with it, so ideally I’d like to keep hold of it.  However even if it fends off the unwanted Saba involvement (and Saba sells out) then the fund size will be much reduced. Does anyone have a view on how this might affect strategy/performance should this occur.

similarly to above, what other trusts should we be looking at as a replacement.

homestraight

Looks like Herald have stopped this corporate action