ClearBridge MLP and Midstream Total Return Fund Inc. Announces Tender Offer Details
ClearBridge MLP and Midstream Total Return Fund (NYSE: CTR) has announced details of its cash tender offer for up to 50% of its outstanding common stock shares. The offer price will be equal to 100% of the Fund's net asset value per share on the expiration date, which is set for June 20, 2024. If the offer is oversubscribed, shares will be repurchased on a pro-rata basis. The Fund has initiated the offer today, May 21, 2024, and plans to reposition its portfolio to ensure prompt payment of proceeds. Investors are advised to review the Offer to Purchase and related documents filed with the SEC for comprehensive details.
- Tender offer targets 50% of outstanding shares.
- Offer price set at 100% of net asset value per share.
- Portfolio repositioning to ensure prompt payment of proceeds.
- Potential oversubscription could lead to pro-rata share repurchase.
- No assurance that share repurchase will reduce or eliminate market price discount to net asset value.
Insights
The tender offer by ClearBridge MLP and Midstream Total Return Fund Inc. for up to 50% of its outstanding shares is a significant event for shareholders. This move can potentially address the discount of the Fund’s market price per share to its net asset value (NAV). Typically, a tender offer at NAV provides shareholders a chance to exit at a fair value, which can be attractive if the shares have been trading below NAV.
In the short term, this could lead to a temporary increase in the share price as investors anticipate the tender offer. However, long-term impacts depend on several factors. If the tender offer reduces the discount effectively, remaining shareholders might see a revaluation of their holdings closer to NAV. But, if the portfolio repositioning results in significant transaction costs or if the market perceives this as a one-time event rather than a sustainable strategy, the benefits might be short-lived.
Investors should also consider the implications of the Fund trimming its portfolio. While the intention is to do this orderly, it might still lead to some short-term volatility depending on the asset liquidity and market conditions. Also, if the offer is oversubscribed, shares will be repurchased on a pro rata basis, potentially leaving some investors unable to redeem as many shares as they would like.
The announcement of the tender offer by ClearBridge MLP and Midstream Total Return Fund Inc. at 100% of NAV is a strategic move to address the persistent discount in its shares. For retail investors, understanding the dynamics of such offers is crucial. When a closed-end fund trades below its NAV, it can be indicative of market skepticism about the fund's management or the underlying assets.
The tender offer could be seen as a confidence-building measure, signaling the management’s belief in the intrinsic value of the fund. However, potential drawbacks include the possibility of only a partial fulfillment for those wanting to sell, as shares are repurchased on a pro rata basis if oversubscribed. Additionally, the market perception of the Fund's long-term strategy is vital. If investors view this as a one-off event rather than part of a broader strategy to enhance shareholder value, the impact might be limited.
Investors should also pay close attention to the Fund’s actions in repositioning its portfolio. This process must be managed to avoid significant losses or disruptions. Furthermore, the cost of repositioning and any potential tax impacts should not be overlooked.
This announcement is not a recommendation, an offer to purchase or a solicitation of an offer to purchase shares of the Fund and the statements in this press release are not intended to constitute an offer to participate in any tender offer. The Offer will be made only by the Offer to Purchase and the related Letter of Transmittal, and related documents, which are on file with the tender offer documentation with the
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 may contain statements regarding plans and expectations for the future that constitute forward-looking statements within the Private Securities Litigation Reform Act of 1995. 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 is contained in the Fund’s filings with the SEC.
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
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Investor Contact: Fund Investor Services 1-888-777-0102
Source: Franklin Resources, Inc.
Source: Legg Mason Closed End Funds
Media Contact: Lisa Tibbitts
+1 (904) 942-4451
Lisa.Tibbitts@franklintempleton.com
Source: Franklin Resources, Inc. and Legg Mason Closed End Funds
FAQ
What is the expiration date for ClearBridge CTR's tender offer?
What percentage of shares is ClearBridge CTR targeting in its tender offer?
How will the repurchase price be determined for the CTR tender offer?
What happens if the ClearBridge CTR tender offer is oversubscribed?
When did ClearBridge CTR commence the tender offer?
