ClearBridge MLP and Midstream Total Return Fund Inc. Announces Preliminary Results of Issuer Tender Offer for Common Stock and Anticipated Date of Merger
ClearBridge MLP and Midstream Total Return Fund (NYSE: CTR) has announced the preliminary results of its issuer tender offer, which expired on June 20, 2024. Approximately 3,774,769 shares were tendered, exceeding the offer for up to 50% of outstanding shares (3,443,416 shares). Consequently, tenders will be accepted on a pro rata basis. The purchase price will be 100% of the per share net asset value as of the close on June 20, 2024, with payments expected around June 25, 2024. Additionally, the Fund is set to merge with ClearBridge Energy Midstream Opportunity Fund (NYSE: EMO) and ClearBridge MLP and Midstream Fund (NYSE: CEM) into EMO, with the merger targeted for August 19, 2024, following stockholder approval and regulatory compliance.
- Tender offer oversubscribed, indicating strong investor interest.
- Payment for tendered shares at 100% net asset value ensures fair compensation.
- Stockholder approval of mergers indicates broad support from shareholders.
- Shares accepted on a pro rata basis may lead to partial fulfillment for investors.
- Uncertainty around the final number of shares accepted and purchase price.
Insights
The announcement of the preliminary results of the issuer tender offer is notable for investors as it indicates significant shareholder interest, with the offer being oversubscribed. This shows a strong desire among shareholders to liquidate their positions at the net asset value (NAV), suggesting some might see the future prospects of the Fund less favorably or simply wish to cash out. The tender offer will reduce the outstanding shares and could potentially increase the NAV per remaining share, as fewer shares will be dividing the same total asset value.
Additionally, the upcoming merger with ClearBridge Energy Midstream Opportunity Fund Inc. (EMO) may present synergies and operational efficiencies. Mergers often aim to combine resources, enhance market presence and reduce costs. However, it also introduces integration risks and uncertainties regarding how well the entities will blend their operations and strategies.
For retail investors, the immediate impact is the potential NAV appreciation due to the tender offer. Long-term implications depend on the execution of the merger and whether it achieves its intended benefits. It is worth monitoring the post-merger performance to see if the combined entity can deliver improved returns.
The oversubscription of the tender offer is a signal of high liquidity demand among investors. The fact that shareholders are willing to tender their shares at NAV indicates they might not expect substantial market price appreciation in the near term. This sentiment needs to be weighed against the broader backdrop of the energy sector, which has seen volatility influenced by fluctuating oil prices and changes in energy policies.
Regarding the merger, the consolidation within the energy and midstream sector can lead to a stronger competitive position and potential cost savings. Yet, the success of such a merger is contingent on effective integration and realization of proposed benefits. Investors should be cautious of integration risks, such as cultural mismatches and operational misalignments, which can often derail potential synergies.
In summary, while the tender offer and merger present immediate and potential long-term benefits, the underlying investor sentiment and sector volatility need to be closely monitored. It’s important for investors to stay informed about subsequent performance and any further strategic moves by the Fund.
Based on current information, approximately 3,774,769 Shares were duly tendered and not withdrawn. Because the number of Shares tendered exceeds 3,443,416 Shares, the Tender Offer has been oversubscribed. Therefore, in accordance with the terms and conditions specified in the Offer to Purchase, the Fund will purchase Shares from all tendering stockholders on a pro rata basis, disregarding fractions. The purchase price and final number of Shares validly tendered and accepted pursuant to the Tender Offer will be announced at a later date. The Fund expects to make cash payments for tendered and accepted Shares at a purchase price equal to
Payment for such Shares will be made on or about June 25, 2024. Shares that were not tendered will remain outstanding.
Any questions about the Tender Offer can be directed to Georgeson LLC, the information agent for the Tender Offer, toll free at (866) 920-4920.
As previously announced on January 26, 2024, the Fund’s Board of Directors approved a proposal to merge (i) the Fund with and into ClearBridge Energy Midstream Opportunity Fund Inc. (NYSE: EMO), and (ii) ClearBridge MLP and Midstream Fund Inc. (NYSE: CEM) with and into EMO (each, a “Merger”), subject to approval by stockholders of each of CEM, CTR and EMO. On May 20, 2024, EMO, CEM and CTR announced stockholder approval of each Merger. It is currently anticipated that each Merger will be effective before markets open on Monday, August 19, 2024, subject to all regulatory requirements and customary closing conditions being satisfied.
About the Fund
The Fund is a non-diversified, closed-end management investment company that is managed by Franklin Templeton Fund Adviser, LLC (formerly known as Legg Mason Partners Fund Advisor, LLC) (“FTFA”), and subadvised by ClearBridge Investments, LLC (“ClearBridge”). FTFA and ClearBridge are both indirect wholly-owned subsidiaries of Franklin Resources, Inc., a global investment management organization operating as Franklin Templeton.
THIS PRESS RELEASE IS NOT A PROSPECTUS, CIRCULAR OR REPRESENTATION INTENDED FOR USE IN THE PURCHASE OR SALE OF FUND SHARES. THIS PRESS RELEASE MAY CONTAIN STATEMENTS REGARDING PLANS AND EXPECTATIONS FOR THE FUTURE THAT CONSTITUTE FORWARD-LOOKING STATEMENTS WITHIN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT ARE FORWARD-LOOKING AND CAN BE IDENTIFIED BY THE USE OF WORDS SUCH AS “MAY,” “WILL,” “EXPECT,” “ANTICIPATE,” “ESTIMATE,” “BELIEVE,” “CONTINUE” OR OTHER SIMILAR WORDS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON THE FUND’S CURRENT PLANS AND EXPECTATIONS, AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS. ADDITIONAL INFORMATION CONCERNING SUCH RISKS AND UNCERTAINTIES ARE CONTAINED IN THE FUND’S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION
For more information about the Fund, please call Fund Investor Services: 1-888-777-0102, or consult the Fund’s web site at www.franklintempleton.com/investments/options/closed-end-funds. The information contained on the Fund’s web site is not part of this press release. Hard copies of the Fund’s complete audited financial statements are available free of charge upon request.
About Franklin Templeton
Franklin Resources, Inc. is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the
Category: Fund Announcement
Source: Franklin Resources, Inc.
Source: Legg Mason Closed End Funds
View source version on businesswire.com: https://www.businesswire.com/news/home/20240621987676/en/
Investor Contact: Fund Investor Services 1-888-777-0102
Media Contact: Lisa Tibbitts
+1 (904) 942-4451
Lisa.Tibbitts@franklintempleton.com
Source: Franklin Resources, Inc. and Legg Mason Closed End Funds
FAQ
What are the preliminary results of the CTR tender offer announced on June 20, 2024?
When will payments be made for the tendered shares of CTR?
What is the purchase price for the tendered shares of CTR?
What is the anticipated date for the CTR merger?
Which funds are merging with CTR?
Has the CTR merger received stockholder approval?
