Templeton Global Income fund GIM Tender offer

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
anpaul147
Posts: 18
Joined: Sun Aug 24, 2014 7:09 pm

Templeton Global Income fund GIM Tender offer

Post by anpaul147 »

The Templeton Global Income fund which has a long history is going through a tender offer of 70% of its shares: https://www.franklintempleton.com/press ... its-shares

For anyone holding it what are your plans ? stay ? leave before the November offer ? wait for it to sell ? ...

Can anyone who understands the change enough bring light to what long term investors should do in this situation ? This seems to be an internal change, nothing to do with the long term asset class performance (which hasn't been great but that's really not the question here).
Tanelorn
Posts: 2370
Joined: Thu May 01, 2014 9:35 pm

Re: Templeton Global Income fund GIM Tender offer

Post by Tanelorn »

anpaul147 wrote: Thu Oct 21, 2021 3:16 pm This seems to be an internal change, nothing to do with the long term asset class performance (which hasn't been great but that's really not the question here).
In May, a well known closed end fund activist group took over the board.

https://www.businesswire.com/news/home/ ... 006125/en/

They are doing this buyback to reduce the discount on the fund and create shareholder value that way.
Topic Author
anpaul147
Posts: 18
Joined: Sun Aug 24, 2014 7:09 pm

Re: Templeton Global Income fund GIM Tender offer

Post by anpaul147 »

Yes I read about the Saba group taking over. What's best to do ? Go out before/after the tender offer or for long term investors the fund should be fine after they are done with it ?
bberris
Posts: 2420
Joined: Sun Feb 20, 2011 8:44 am

Re: Templeton Global Income fund GIM Tender offer

Post by bberris »

I've gone through a number of these because I invest in a few CEFs. Most recently was VTA, another Saba target. You can look up what happened after the offer. I always tender all my shares when the offer is 98 % of NAV or more. After the offer closes, you will be able to buy back at less than the offer price if you want to.

As far as the future, I don't believe Saba wants to operate the fund or take it over; their purpose is to pressure management to reduce the discount to NAV. So if you liked it before, you may like it after. The reduced size of the fund will mean the expense ratio will go up.

Edit:
I see now that Saba has taken over operation of PPR (now BRW) and changed some of the investments. So it is possible that GIM managers could fold and give it over to Saba.
bberris
Posts: 2420
Joined: Sun Feb 20, 2011 8:44 am

Re: Templeton Global Income fund GIM Tender offer

Post by bberris »

Here's an article showing what happens after a tender offer:

https://seekingalpha.com/article/446143 ... n-progress
Tanelorn
Posts: 2370
Joined: Thu May 01, 2014 9:35 pm

Re: Templeton Global Income fund GIM Tender offer

Post by Tanelorn »

Saba made a nice profit for BRW, the other CEF they took over, on that Trump SPAC move since they owned DWAC as a safe low risk asset with some upside potential. Sometimes you make 1-2% more than treasuries, sometimes you make 1000% if you’re brave enough to hold on. Weinstein was not and it sounded like his politics drove his decision.

https://www.nasdaq.com/articles/weinste ... 21-10-22-0
bberris
Posts: 2420
Joined: Sun Feb 20, 2011 8:44 am

Re: Templeton Global Income fund GIM Tender offer

Post by bberris »

Just an update. Apparently Saba did not participate in the tender offer, which was undersubscribed. Now Saba wants a tender offer at over NAV. This would obviously cost the shareholders who don't tender. Interesting times for CEFs.
Post Reply