1. AEF announces a preliminary cash tender offer for 10.15M shares. 2. Offer covers 20% of outstanding shares and expired at 5:00 p.m.
Cash tender offers in closed-end funds typically reduce the share count, potentially narrowing discounts and boosting net asset value. Similar historical repurchase events have led to immediate price support and positive market sentiment.
The cash tender reduces outstanding shares, which can improve NAV and earnings per share, thereby potentially boosting the stock’s value. This action is significant enough to attract investor attention and impact price in closed-end funds.
The announcement is likely to have an immediate positive impact on the share price as market participants react. Past instances indicate a short-term rally post-announcement before longer-term effects are evaluated.