ClearBridge Energy Midstream Opportunity Fund Inc. Announces Preliminary Results of Issuer Tender Offer for Common Stock And Anticipated Date of Merger
ClearBridge Energy Midstream Opportunity Fund (NYSE: EMO) announced the preliminary results of its issuer tender offer, which expired on June 20, 2024. Approximately 7,259,865 shares were tendered, surpassing the 6,393,645 share limit, leading to a prorated purchase. The final purchase price will be based on the June 20 net asset value, with payment expected by June 25, 2024. Additionally, the Fund's merger with ClearBridge MLP and Midstream Fund (CEM) and ClearBridge MLP and Midstream Total Return Fund (CTR) was approved by shareholders and is anticipated to be effective by August 19, 2024.
- Approximately 7,259,865 shares were tendered in the issuer tender offer.
- The tender offer was oversubscribed, indicating strong shareholder interest.
- The merger with CEM and CTR was approved by shareholders and is set to be effective by August 19, 2024.
- The number of shares tendered exceeded the 6,393,645 share limit, necessitating a prorated purchase.
- Final purchase price and exact number of accepted shares are still pending.
Insights
The recent announcement by ClearBridge Energy Midstream Opportunity Fund Inc. regarding the preliminary results of their issuer tender offer is important for investors. The tender was significantly oversubscribed, which indicates strong interest from shareholders wanting to liquidate their positions. This suggests confidence in the fund's management to provide liquidity at net asset value (NAV).
From a financial standpoint, the purchase price being set at 100% of per Share NAV ensures that investors receive fair value for their shares. This action can help in reducing the total number of outstanding shares, potentially increasing the NAV for the remaining shares. Nevertheless, the oversubscription means that not all tendered shares will be purchased, which may leave some investors holding shares they intended to sell.
The upcoming merger with ClearBridge MLP and Midstream Fund Inc. and ClearBridge MLP and Midstream Total Return Fund Inc. will likely create a more substantial combined entity, possibly increasing operational efficiencies and attracting more significant institutional investments. However, mergers bring integration risks and potential disruptions during the transition period.
The oversubscription of ClearBridge Energy Midstream Opportunity Fund Inc.'s tender offer highlights the underlying demand for liquidity among its shareholders. This is particularly relevant in the energy sector, which has seen volatility due to fluctuating commodity prices and regulatory changes. Oversubscription means that the market perceives the NAV as an accurate reflection of the fund's value, which is reassuring for retail investors.
The anticipated mergers mark a significant consolidation within the sector, potentially leveraging economies of scale. Investors should note the regulatory and customary closing conditions that still need to be satisfied for the merger to proceed. This timeline suggests a short-to-medium-term period of transition and integration, which could present both opportunities and risks. The combined entity could benefit from a diversified portfolio, potentially enhancing its market position.
Based on current information, approximately 7,259,865 Shares were duly tendered and not withdrawn. Because the number of Shares tendered exceeds 6,393,645 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) ClearBridge MLP and Midstream Fund Inc. (NYSE: CEM) with and into the Fund, and (ii) ClearBridge MLP and Midstream Total Return Fund Inc. (NYSE: CTR) with and into the Fund (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/20240621480092/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 EMO's issuer tender offer?
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What is the purchase price for the tendered EMO shares?
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How will oversubscription of shares affect EMO's tender offer?
