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Follower ○○○

ADX did not tender PEO shares

9,414,379 of 29,778,000 PEO shares were tendered, 31.6% of the float.
PEO purchased 20% of the float, 5,955,676 shares.

Ancora/Bulldog tendered 3,320,990, 35% of the shares tendered.
ADX did not tender its 2,186,774 shares
The Pro-Rata Ratio was 0.6326

Ancora/Bulldog sold PEO shares ahead of the tender.
Ancora/Bulldog sold 2,100,858 shares to the tender.
Ancora/Bulldog still owns 1,168,908, 4.9% (after accounting for the tender).

After the tender, PEO has 23,822,700 shares outstanding.
ADX still owns 2,186,774, now 9.2% of the float.

XLE, XOM and CVX prices fell 6% between 9/3 and 9/14.
XPEOX dropped less than 2%.
XPEOX experienced some anti-dilution, about 1%.
PEO probably sold some of its large XOM and CVX positions ahead of the 6% price drops to fund the tender.

PEO now has $292 Million AUM and a large unrealized tax loss.
The tender offer cost PEO $71 Million in AUM.
The PEO discount is back to -14%.

2 Replies
Follower ○○

Re: ADX did not tender PEO shares

Good pickup - I forgot ADX owned shares of PEO.

They should have tendered.   There is no reason to own PEO.

I wonder if they get to vote those shares?



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Explorer ○○

Re: ADX did not tender PEO shares

Count me as surprised that ADX does not mirror vote their PEO holding. From their latest N-PX it showed that ADX voted for all the management slots. I would suspect their could be some question about that practice if someone were so inclined.

I certainly think the refusal to tender PEO shares is defensible since the retained shares may offer a good future return if the fossil fuel complex gets popular again. I'm sure they could have done better by tendering  but that;s just my opinion & presumably the BOD thought better of it. In addition since it was oversubscribed the after effects might also justify not tendering (at least it could be a legal defense of skipping the tender. 

I have to observe if the tender had been for 92% of NAV I suspect both the tendering shareholders & non tendering shareholders would have been better off. The tendering ones likely could have gotten all their shares accepted (albeit at a reduced price) while the non tendering shareholders would have gotten a significantly richer bump in nav. 


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