Virtus Total Return Fund Inc. Announces First Conditional Tender Offer

Rhea-AI Summary

Virtus Total Return Fund (NYSE: ZTR) has announced its first conditional tender offer to purchase 10% of its outstanding shares. The tender offer was triggered as the fund's average trading discount exceeded 12%, reaching 12.51% during the measurement period from May 31, 2024, to November 26, 2024. The tender offer will run from January 7, 2025, to February 5, 2025, offering shareholders cash equal to 98% of the fund's net asset value at the expiration date, minus tender offer expenses.

Positive

• Fund will repurchase 10% of outstanding shares at 98% of NAV, potentially reducing the trading discount
• Share buyback could provide liquidity opportunity for shareholders

Negative

• 12.51% average trading discount indicates shares trading significantly below NAV
• Shareholders will receive 2% less than NAV plus bear tender offer expenses

Insights

Financial Analyst

This tender offer represents a significant development for ZTR shareholders. The 12.51% average trading discount triggering this offer indicates persistent undervaluation of the fund's shares in the market. The upcoming tender at 98% of NAV provides an exit opportunity at a price closer to the fund's intrinsic value.

The 10% share repurchase could help reduce the trading discount and potentially boost the share price for remaining shareholders. However, investors should note that if the tender is oversubscribed, shares will be accepted on a pro-rata basis, meaning not all tendered shares may be purchased. The timing in early 2025 gives shareholders adequate time to evaluate their positions and make informed decisions about participation.

HARTFORD, Conn.--(BUSINESS WIRE)-- Virtus Total Return Fund Inc. (NYSE: ZTR) (“the Fund”) today announced it met the conditions to trigger its first conditional tender offer (“Tender Offer”) to acquire another 10% of the Fund’s outstanding shares.

This Tender Offer was triggered when the Average Trading Discount of the Fund’s shares exceeded 12% during the period from May 31, 2024 through November 26, 2024 (“measurement period”). The average trading discount during this measurement period was 12.51%.

This Tender Offer period is expected to commence on or about January 7, 2025 and expire on or about February 5, 2025 (“expiration date”), unless extended. Under this Tender Offer, the Fund will seek to acquire 10% of its outstanding shares in exchange for cash at a price equal to 98% of its net asset value (net of expenses related to the Tender Offer) as of the close of regular trading on the expiration date.

Further information about the Tender Offer will be announced at a later date and set forth in the Fund’s offering materials, which will be distributed to the Fund’s shareholders.

About the Fund

Virtus Total Return Fund Inc. is a diversified closed-end fund whose investment objective is capital appreciation, with income as a secondary objective. Virtus Investment Advisers, Inc. is the investment adviser and Duff & Phelps Investment Management Co. and Newfleet Asset Management are the subadvisers to the Fund. For more information on the Fund, contact shareholder services at (866) 270-7788, by email at closedendfunds@virtus.com, or through the Closed-End Funds section of virtus.com.

Fund Risks

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.

The Fund has not commenced the Tender Offer described in this release. The Tender Offer will only be made pursuant to a Tender Offer statement on Schedule TO containing an offer to purchase, a related letter of transmittal and other documents filed with the SEC as exhibits to the Tender Offer statement on Schedule TO (collectively, the “Tender Offer Materials”), with all such documents made available on the SEC’s website at sec.gov. The Fund will also make available to shareholders, without charge, the offer to purchase, the letter of transmittal, and other necessary documents related to the Tender Offer. Shareholders should read any Tender Offer Materials carefully and, in their entirety, when and if they become available, as well as any amendments or supplements thereto, as they would contain important information about the Tender Offer.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful under the securities laws of any such state.

Investing involves risk and it is possible to lose money on any investment in the Fund.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241202904161/en/

For Further Information:

Shareholder Services

(866) 270-7788

closedendfunds@virtus.com

Source: Virtus Total Return Fund Inc.

FAQ

What is the tender offer price for Virtus Total Return Fund (ZTR) shares?

The tender offer price will be 98% of the fund's net asset value as of the expiration date, minus related expenses.

When does the ZTR tender offer begin and end?

The tender offer is expected to begin on January 7, 2025, and end on February 5, 2025, unless extended.

What percentage of ZTR shares will be purchased in the tender offer?

The fund will seek to acquire 10% of its outstanding shares.

What was ZTR's average trading discount during the measurement period?

The average trading discount was 12.51% during the period from May 31, 2024, through November 26, 2024.