Special Opportunities Fund, Inc.Announces Declaration of Dividends, Buyback of Convertible Preferred Shares, Increase in Dividends and Offer of Rights
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NEW YORK – (BUSINESS WIRE) – Special Opportunities Fund, Inc. (NYSE: SPE) (the “Fund”) today announced that the Board of Directors of the Fund (the “Board”) has declared a dividend in quarterly cash of $ 0.21875 per on the 3.50% Convertible Preference Shares, Series B (the “Convertible Preference Shares”). The dividend is payable on June 30, 2021 to holders of record on June 21, 2021.
The Fund also announced that the Board of Directors has determined, in accordance with the ‘optional redemption’ provision of the Convertible Preferred prospectus, to redeem all of the Convertible Preferred shares that are still outstanding at 5:00 p.m. EST on July 9. 2021 at $ 25. per share.
Holders of the Convertible Preferred may, until 5:00 p.m. EST on July 9, 2021, convert their preferred shares into common stock at a ratio of (1) 1.9416 common shares for each share of the Convertible Preferred until June 21, 2021 and (2) 1.9558 from June 22, 2021 to July 9, 2021 (in both cases, holders will receive cash instead of any fractional common share). Holders of Convertible Preferred shares who do not elect to convert their shares to common stock by 5:00 p.m. EST on July 9, 2021 will receive the redemption price of $ 25 in cash per share and no dividend on the Convertible Preferred will accrue. after July 9. , 2021. The redemption will be automatic and does not require any action on the part of the shareholder. As of the date of this release, the market price of Convertible Preferred is approximately $ 30 per share, which is significantly higher than $ 25 per share. Therefore, holders of the Convertible Preferred are advised to check the market price of the common shares and the Convertible Preferred before determining whether and when to convert their shares into common shares.
No Preferred Convertible shares will remain in circulation after July 9, 2021; therefore, directors previously elected by the preferred convertible security holders will remain on the board until the next annual meeting of shareholders and until their successors are duly elected.
The Fund also announced that the Board has approved an increase in the monthly distributions to common shareholders provided for under the Fund’s managed distribution plan (the “Plan”). Beginning in July 2021, the Fund intends to pay monthly distributions at an annual rate of at least 8% (or 0.667% per month), based on the net asset value (NAV) of the common shares of the Fund on last working day of 2020, an increase of 1% over the previous rate of 7% per annum. Under the Plan, to the extent that sufficient investment income is not available on a monthly basis, the Fund will distribute long term capital gains and / or return of capital. To the extent that the net investment income and net realized capital gains of the Fund exceed the total amount distributed in accordance with the managed distribution plan, the Fund may make an additional year-end distribution. No conclusions should be drawn about the performance of the Fund’s investments from the amount of the distributions. The Board may change the terms of the Plan or terminate the Plan at any time without notice to Shareholders, which could adversely affect the market price of the Common Shares of the Fund. The Plan will be subject to a periodic review by the Board, including an annual review of the Annual Fixed Rate to determine if an adjustment should be made. The Fund will issue a notice to common shareholders which will provide an estimate of the composition of each distribution. For tax reporting purposes, the actual composition of the total amount of distributions for each year will continue to be provided on a Form 1099-DIV issued after the end of the year.
Finally, the Fund announced that the Board has approved the filing with the SEC of a registration statement for a common shareholder rights offering authorizing holders of such rights to purchase shares of a new class of shares. preferred convertibles. Although the terms of the rights offer have not yet been established by the board of directors, a portion of the funds raised may be used to conduct a public offer to purchase common shares.
John Buckel, US Bank Global Fund Services (1-414-765-4255)
Source: Special Opportunities Fund, Inc.