Impax Environmental Markets Investment Trust

where_are_we

I would welcome any thoughts on what action I should take on the proposed tendering of shares in Impax Environmental Markets IT in order to thwart a takeover by activist investor Saba.

There appears to be a chance to profit from a NAV discount of around 7% by accepting the tender offer. Does it matter which way I vote?

Albermarle

The deal seemed to be dependent on Saba approving the tender in a vote, and I got the impression that this seemed unlikely. So the actual tender offer might never actually come to fruition anyway.

TheTelltaleChart

The Board of Impax Environmental Markets are following the same nuclear standoff approach as Herald. See

https://forums.moneysavingexpert.com/discussion/6650965/herald-corporate-action-tender-offer

I.e. the idea is that either Saba agree to sell out at close to NAV in the first tender offer (which also provides an opportunity for other shareholders to exit on the same terms, which may indeed be attractive), or the first tender offer is cancelled and instead there is a second tender offer in which everybody who doean't want to own shares in a Saba-controlled trust can get out, again at close to NAV, before that happens.

The first tender can only go ahead if Saba agree to it, so your vote can't affect that; but you could use it to register approval (or disapproval) of the Board's approach.

Numbersup

Not well up on these things at all, so forgive ignorance showing, but to me it seems ideally and morally I might want to vote positively for the board . The takeovers are pretty ruthless it seems and you dont know whether the likes of SABA will actually improve the fund financially ,or do a hit and run either. It goes against the grain to encourage and enable these ruthless outfits that seem to be invading and causing havoc . Maybe SABA's behaviour will put a fire under the board which makes them pull their socks up , because the fund certainly hasnt done very well the last few years despite investing in companies to do with sustainability for the future . If you're a bare trust trustee for an IMPAX fund holder though and fear Impax wont improve its performance ,and youre offered a way to get out now which could perhaps be more financially attractive for your beneficiary , do you ignore morals etc and just do what could be best for the beneficially , bearing in mind its only a 'could do well' and even experts cant tell you for sure or do you as recommended in various articles Ive read ,stay moral and support the boards recommendation ?

TheTelltaleChart

https://forums.moneysavingexpert.com/discussion/comment/81875722#Comment_81875722

I'm not sure this is much of a moral dilemma. It is pretty predictable (though they won't say what their intentions are) that Saba would change the investment remit of any trust they get control of, making it similar to the comparble US vehicles they control, where they invest the assets in other trusts, with the aim of taking control of them, too, to keep extending the assets they are able to charge investment management fees for. It is all about making Saba more money by having more assets managed by them, not about managing the assets for the benefit of the other investors. Self-interest is surely in agreement with principles here, in that it would not make sense on either count to end up with Saba managing your investments.

OTOH, it is true that a hostile approach, such as Saba's, can have a beneficial effect if it makes the Board "pull their socks up", as you say. In this case, the Board probably wouldn't have been proposing tenders in which all shareholders had the option of selling at close to NAV, if it were not for Saba's intervention. But, however we got here, right now it is the Board proposing these tenders, so if you'd like to get out at close to NAV, support the Board and tender your shares.

However, if what you want isn't to sell your shares, but for the trust to stick to more-or-less the same investment area but do it better, then I don't know if there's any reason to expect that. I haven't been following the details of how IEM invests.

Numbersup

Thanks, very useful .

Numbersup

So SABA has thwarted Impax's plans and a second offer is imminent. Does anyone know if you declined the first failed offer by not signing the 'sell' form, you will get a new chance with the next offer?

k12479

I'm not sure Saba thwarted Impax's plans, Saba not voting for it was expected, wasn't it?

But yes, you would get the chance to tender your shares in the next offer.

k12479

IEM published details of the exit tender offer today:

https://www.londonstockexchange.com/news-article/IEM/publication-of-exit-tender-offer-circular/17505665

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81927294#Comment_81927294

Time to cash in I guess, The IT has not been performing very well anyway.

k12479

Yes, I've not been too happy with it either, so also looking to exit.