Thu, Mar 28, 2024
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Industry Updates

ALTIN issues tradeable put options

Tuesday, January 20, 2015
Opalesque Industry Update - The Board of Directors of ALTIN AG, the Swiss alternative investment company, has decided, in line with the media release of 15 January 2014, to implement a further share buyback for the purpose of a capital reduction through the issuance of tradable put options. The put options will be assigned for free to all shareholders with a strike price set at an attractive premium to the market price.

Strong commitment to reduce the discount in a sustainable way

ALTIN's Board of Directors reaffirms its strong commitment to better align the share price of the company with its NAV and hence to reduce the discount in the best interest of all shareholders. As stated in January 2014, the key element for investors is simply the share price performance over the medium term. As the share price performance in 2014, albeit by a very narrow margin, did not achieve the stated target, a capital reduction of up to 10% will be undertaken as quickly as technically feasible.

The Board reiterates its commitment to implement further capital buybacks at the end of any given calendar year during which the share price may have failed to appreciate by less than 10% to 12%, whilst the discount to NAV remains at significant levels. The Board remains of the opinion that further capital reductions will be far more effective if used as a mechanism to compensate investors during periods of lower share price appreciation, rather than as an indiscriminate discount reduction instrument. By boosting share price performance and transferring intrinsic value to shareholders, these capital reductions should prove an effective compensatory measure.

2014 was a positive year for the company

The ALTIN share price appreciated by 8.6% and 10.2% on the SIX Swiss Exchange and London Stock Exchange respectively. The share price performance was underpinned by an NAV that, on estimated numbers to the end of December 2014, grew by about 5.8% and by a further narrowing of the discount. The NAV performance is close to the stated target and meaningfully ahead of hedge fund indices and Fund of Fund peers. The strategic repositioning of the portfolio in 2013, which has allowed the fund to exploit the significant advantage offered by its permanent capital base, is continuing to bear fruits.

Tradable put options remain the best solution

Buying back shares through tradable put options continues to offer several advantages over the conventional buyback on a second trading line on the SIX Swiss Exchange. Firstly, given the strong limitations on the daily buyback volume, a put options solution allows for a much faster capital reduction process. Secondly, as the strike price will be set at an attractive premium to the market price, the put options benefits will be clear to all shareholders. This solution provides an equal treatment of all investors, since shareholders can directly or indirectly participate in the buyback plan.

Timing and strike price

The Board intends to implement the share buyback as rapidly as technically possible. A further press release will be issued in due course to announce the timing, strike price and other technical aspects. However, at this stage the Board reminds shareholders that they will be in a position to either tender ALTIN shares at a fixed strike price via the exercise of their put options, or, since the puts are freely tradable during a limited time period, sell them in the market.

The Board of Directors will determine a strike price at a level that better reflects its understanding of a fair valuation of the company, making the tendering of the shares attractive and, at the same time, ensuring that the put options will have intrinsic value. Tendered shares will then be cancelled after AGM approval, which will result in the intended capital reduction as well as NAV per share accretion.

Press Release

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1