Tuesday, March 11, 2008

Challenger Infrastructure Fund Receives Takeover Offer

One of my investments, Challenger Infrastructure Fund has received a takeover offer. The offer is from Arkmile Investments who already own 19% of the fund. Arkmile is associated with the British based Tchenguiz family. The offer is for $A3.50 per share, while the stock is currently trading at $A2.44. I wish I had the money to buy more, but I don't really. Anyway, this would return us nearer to net asset value which was $A4.05 at December 31st. I expect the board will try to get a bit higher offer. My average price after considering distributions received is $A2.90. So I'm underwater now but this offer if realised would result in a profit for this investment. Expect more such takeovers of undervalued exchange listed closed end funds. Another of my holdings Everest Brown and Babcock Investment Trust (EBB.AX) which is a listed fund of hedge funds is seeing accumulation by hedge funds. Ideally, I'd like to see these investments return closer to NAV and continue to be listed. Second best is a takeover of this type and an exit from the investment.


The shares have reopened for trading, last price $A3.20. One little piece of good news in all the gloom.

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