Delaware Enhanced Global Dividend and Income Fund Announces Expiration of Tender Offer

Rhea-AI Summary

Delaware Enhanced Global Dividend and Income Fund (NYSE: DEX) announced the results of its tender offer to purchase up to 594,367 Common Shares, representing 5% of its outstanding shares. The offer, which expired on June 29, 2021, saw approximately 31.24% of the shares tendered, equating to about 3,713,508 Common Shares. Due to excess share tendering, purchases will be prorated. The Fund plans to pay for accepted shares at 98% of its net asset value (NAV) as of June 30, 2021, with payments expected within ten business days. The Fund aims for a targeted annual distribution rate of 6.5% of its average NAV.

Positive

• Targeted annual distribution rate of 6.5% of average NAV per share.
• Successful tender offer with 31.24% of shares tendered.

Negative

• Shares tendered exceeded the offer, leading to proration for purchases.

Delaware Enhanced Global Dividend and Income Fund (NYSE: DEX) (the “Fund”), a closed-end management investment company, today announced the preliminary results of its issuer tender offer to purchase for cash up to 594,367 of its common shares (“Common Shares”), representing up to five percent of its issued and outstanding Common Shares, without par value. The offer expired at 11:59 p.m., New York City time, on Tuesday, June 29, 2021. Based on current information, approximately 31.24% shares of common stock, or approximately 3,713,508 of the Fund’s Common Shares outstanding, were tendered through the expiration date. This total does not include shares tendered pursuant to notices of guaranteed delivery. Because the number of shares exceeded 594,367 shares, the relative number of Common Shares that will be purchased from each shareholder will be prorated based on the number of Common Shares properly tendered. The final number of Common 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 Common Shares at a price equal to 98% of the Fund’s net asset value (NAV) as of the close of regular trading on the New York Stock Exchange on Wednesday, June 30, 2021. Payment for Common Shares tendered and accepted is expected to be sent to tendering shareholders within approximately ten business days after the expiration date.

The Fund’s primary investment objective is to seek current income, with a secondary objective of capital appreciation. The Fund invests globally in dividend-paying or income-generating securities across multiple asset classes, including but not limited to: equity securities of large, well-established companies; securities issued by real estate companies (including real estate investment trusts and real estate industry operating companies); debt securities (such as government bonds; investment grade and high risk, high yield corporate bonds; and convertible bonds); and emerging market securities. The Fund also uses enhanced income strategies by engaging in dividend capture trading; option overwriting; and realization of gains on the sale of securities, dividend growth, and currency forwards. There is no assurance that the Fund will achieve its investment objectives.

Under normal market conditions, the Fund will invest: (1) at most 60% of its net assets in securities of U.S. issuers; (2) at least 40% of its net assets in securities of non-U.S. issuers, unless market conditions are not deemed favorable by the Manager, in which case, the Fund would invest at least 30% of its net assets in securities of non-U.S. issuers; and 3) up to 25% of its net assets in securities issued by real estate companies (including real estate investment trusts and real estate industry operating companies). In addition, the Fund utilizes leveraging techniques in an attempt to obtain higher return for the Fund.

The Fund has implemented a managed distribution policy. Under the policy, the Fund is managed with a goal of generating as much of the distribution as possible from net investment income and short-term capital gains. The balance of the distribution will then come from long-term capital gains to the extent permitted, and if necessary, a return of capital. A return of capital may occur for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with ‘yield’ or ‘income’. Even though the Fund may realize current year capital gains, such gains may be offset, in whole or in part, by the Fund’s capital loss carryovers from prior years.

Under the Fund’s managed distribution policy, the Fund makes monthly distributions to common shareholders at a targeted annual distribution rate of 6.5% of the Fund’s average NAV per share. The Fund will calculate the average NAV per share from the previous three full months immediately prior to the distribution based on the number of business days in those three months on which the NAV is calculated. The distribution will be calculated as 6.5% of the prior three month’s average NAV per share, divided by 12. The Fund will generally distribute amounts necessary to satisfy the Fund’s managed distribution policy and the requirements prescribed by excise tax rules and Subchapter M of the Internal Revenue Code. This distribution methodology is intended to provide shareholders with a consistent, but not guaranteed, income stream and a targeted annual distribution rate and is intended to narrow any discount between the market price and the NAV of the Fund’s Common Shares, but there is no assurance that the policy will be successful in doing so. The methodology for determining monthly distributions under the Fund’s managed distribution policy will be reviewed at least annually by the Fund’s Board of Trustees, and the Fund will continue to evaluate its distribution in light of ongoing market conditions.

The offer to purchase and other documents filed by the Fund with the U.S. Securities and Exchange Commission (SEC), including the Fund’s annual report for the fiscal year ended November 30, 2020, are available without cost at the Commission’s website (sec.gov) or by calling the Fund’s Information Agent.

About Macquarie Investment Management

Macquarie Investment Management, a member of Macquarie Group, is a global asset manager with offices in the United States, Europe, Asia, and Australia. As active managers, we prioritize autonomy and accountability at the team level in pursuit of opportunities that matter for clients. Macquarie Investment Management is supported by the resources of Macquarie Group (ASX: MQG; ADR: MQBKY), a global provider of asset management, investment, banking, financial and advisory services.

Advisory services are provided by Macquarie Investment Management Business Trust, a registered investment advisor. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide. For more information about Delaware Funds^® by Macquarie, visit delawarefunds.com or call 800 523-1918.

Other than Macquarie Bank Limited (MBL), none of the entities referred to in this document are authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL, a subsidiary of Macquarie Group Limited and an affiliate of Macquarie Investment Management. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.

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FAQ

What is the outcome of DEX's recent tender offer?

Approximately 31.24% of Common Shares were tendered, leading to proration.

What is the monthly distribution rate for DEX?

DEX aims for a targeted annual distribution rate of 6.5% based on its average NAV.

When will DEX pay for the accepted shares from the tender offer?

Payment is expected within ten business days after June 30, 2021.

What was the price for tendered shares in DEX's offer?

Shares will be purchased at 98% of the Fund's NAV as of June 30, 2021.

What does proration mean for DEX shareholders?

Proration means shareholders may receive a reduced number of shares purchased due to the high volume of tenders.