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Virtus Total Return Fund Inc. Announces Final Results of Tender Offer
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
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Rhea-AI Summary
Virtus Total Return Fund Inc. (NYSE: ZTR) announced the final results of its tender offer to acquire 10% of its outstanding shares. The Fund accepted 6,857,832 shares, representing 10% of its outstanding shares, for payment on or about May 8, 2024. A total of 23,504,666.8517 shares were properly tendered, with approximately 29.18% of the shares tendered by each stockholder accepted for payment. The purchase price of the accepted shares is 98% of the Fund's net asset value per share, equal to $5.9976 per share.
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Insights
Tender offers can be a strategic move by companies to rebalance their capital structure or provide liquidity to shareholders. In this case, Virtus Total Return Fund Inc.'s decision to repurchase 10% of its outstanding shares is a significant move. By offering 98% of the net asset value (NAV) per share, the Fund is effectively signalling a level of confidence in its underlying assets and a willingness to return capital to shareholders at a near-NAV price. This can be attractive to investors who wish to liquidate their holdings without a significant discount. Moreover, the prorated acceptance of shares reflects a higher demand than what the Fund was willing to repurchase, which could be interpreted as a positive sentiment among investors towards the Fund. However, it's important for investors to consider the potential for reduced liquidity and ownership concentration following such a buyback.
The response to Virtus Total Return Fund Inc.'s tender offer, with over twice the number of shares tendered than accepted, indicates a strong interest from shareholders in selling their shares back to the company. While this tender offer might suggest an immediate positive outcome for the stock due to the reduction in outstanding shares, it's essential to scrutinize the underlying reasons why shareholders were eager to sell at a 2% discount to NAV. Was it due to a perceived overvaluation, liquidity needs, or a lack of confidence in future performance? This can guide investors on the general market sentiment and whether the repurchase aligns with the company's growth strategy or is merely a short-term boost to financial metrics.
HARTFORD, Conn.--(BUSINESS WIRE)--
Virtus Total Return Fund Inc. (NYSE: ZTR) (“the Fund”) today announced final results of its tender offer (“Tender Offer”) to acquire 10% of its outstanding shares, which expired May 1, 2024 at 5:00 p.m. eastern time.
The Fund accepted 6,857,832 shares, representing 10% of its outstanding shares, for payment on or about May 8, 2024. A total of 23,504,666.8517 shares were properly tendered. Therefore, on a prorated basis, approximately 29.18% of the shares tendered by each tendering stockholder have been accepted for payment.
The purchase price of the accepted shares is 98% of the Fund’s net asset value per share determined as the close of regular trading session of the New York Stock Exchange on May 2, 2024, which is equal to $5.9976 per share.
An investment in a fund is subject to risk, including the risk of possible loss of principal. A fund’s shares may be worth less upon their sale than what an investor paid for them. Shares of closed-end funds may trade at a premium or discount to their NAV. For more information about the Fund’s investment objective and risks, please see the Fund’s annual report. A copy of the Fund’s most recent annual report may be obtained free of charge by contacting “Shareholder Services” as set forth at the bottom of this press release.
