Designed to Prevent Creeping Control and
Protect Long-Term Value for All Shareholders
The Rights Plan Committee (the “Committee”) of the Board of
Directors (the “Board”) of ASA Gold and Precious Metals Limited
(“ASA” or the “Company”) (NYSE:ASA) has unanimously adopted a
limited-duration shareholder rights plan (“Rights Plan”) to protect
the interests of the Company and all of its shareholders. The
Rights Plan is currently effective and will expire at the close of
business on December 20, 2024. The terms of the Rights Plan are
substantively identical to the terms of the shareholder rights plan
that was adopted by the Board on April 26, 2024.
The limited-duration Rights Plan was adopted in response to the
rapid and significant accumulation of ASA shares by Saba Capital
Management, LP (“Saba”) that occurred in late 2023, which was
followed by Saba’s proxy contest during the first quarter of 2024
to gain control of the Company’s Board. Based on public filings,
Saba’s current position in ASA represents approximately 17.02% of
ASA’s outstanding common shares. The Board is currently composed of
two directors who were proposed by Saba and elected at the
Company’s April 26, 2024 shareholder meeting, and two directors who
were proposed by the prior Board and re-elected at the April 26,
2024 shareholder meeting. The Rights Plan Committee was established
by the prior Board on April 26, 2024 to review, consider, make
determinations and approve or otherwise cause the Company to take
actions with respect to any matters relating to a shareholder
rights plan.
The Rights Plan is intended to prevent Saba’s unilateral attempt
to obtain creeping control of the Company, which the Committee
believes would be detrimental to ASA and its shareholders as a
whole. The Rights Plan is designed to enable ASA’s shareholders to
realize the long-term value of their investment, provide an
opportunity for shareholders to receive fair and equal treatment in
the event of any proposed takeover of ASA and guard against tactics
to gain control of ASA without paying shareholders what the Board
or the Committee considers to be an appropriate premium for that
control or recompense for the costs incurred by the Company in its
efforts to protect shareholder interests. The Rights Plan is not
intended to deter offers or preclude the Board or the Committee
from taking action that it believes is in the best interest of the
Company and its shareholders.
The Committee recognizes that Saba has a large share position
and affiliated status with the Company, and welcomes engagement
with Saba that is consistent with the Company’s status as a
non-diversified, equity closed-end fund that seeks long-term
capital appreciation through investing in the precious metals
sector of the global capital markets. The Committee believes that
the previous shareholder rights plans have been successful in
deterring Saba from accumulating additional shares of the Company
and thus achieving creeping control of the Company without paying
an appropriate control premium to the Company’s shareholders. If
Saba were to gain control, the Committee believes it is highly
likely that Saba would seek to dramatically modify the Company’s
core identity and strategy, including but not limited to using its
affiliate status to either become the Company’s investment adviser
(notwithstanding Saba’s lack of experience in precious metals
equities) or select another adviser in lieu of the Company’s
current adviser. Accordingly, it appears to the Committee that the
interests of the Company and its shareholders would be adversely
affected if Saba were to gain control of the Company. The Committee
seeks to work with the Board and shareholders, including Saba, to
develop possible courses of action and alternatives for the
Company. However, Saba has thus far chosen to not enter into
discussions regarding possible means of enhancing shareholder
value. Saba has instead indicated its intention is to nominate a
director slate at the next annual shareholder meeting to gain full
control of the Company. Saba has filed suit against the Company and
individuals who had previously served on the Board and two current
Board members for adopting the shareholder rights plans, seeking a
determination that such rights plans are illegal under the
Investment Company Act of 1940. The lawsuit is pending in the
Southern District of New York. With the new Rights Plan, the
Committee seeks to deter Saba from its efforts to take control of
the Company by purchasing more shares. However, the Committee
members will continue to engage with the full Board, Saba and other
shareholders to develop constructive ideas for the future of the
Company.
ASA will issue one right for each ASA common share outstanding
as of the close of business on September 9, 2024. All shareholders,
including Saba, will receive one right for each share owned. The
rights will initially trade with ASA’s common shares and will
become exercisable only if a person acquires 15% or more of ASA’s
outstanding common shares. Any shareholders with beneficial
ownership of 15% or more of ASA’s outstanding common shares
(including Saba) prior to this announcement are grandfathered at
their beneficial ownership levels at the date the Rights Plan was
adopted, but are not permitted to acquire additional common shares
representing 0.25% or more of the outstanding common shares without
triggering the Rights Plan.
Pursuant to the Rights Plan, should it be triggered, the
Committee may decide that:
- Each holder of a right (other than the acquiring person, whose
rights will have become void and will not be exercisable) will be
entitled to purchase, for a purchase price of $1.00 per share, one
ASA common share.
- Alternatively, (on a cashless basis) each outstanding right
(other than the rights held by the acquiring person, whose rights
will have become void) will be exchanged for one common share.
Further details about the Rights Plan will be contained in a
Form 8-K and Form 8-A to be filed by ASA with the U.S. Securities
and Exchange Commission.
About ASA
ASA is a non-diversified, closed-end fund that seeks long-term
capital appreciation primarily through investing in companies
engaged in the exploration for, development of projects in, or
mining precious metals and minerals.
It is a fundamental policy of ASA that at least 80% of its total
assets must be (i) invested in common shares or securities
convertible into common shares of companies engaged, directly or
indirectly, in the exploration, mining or processing of gold,
silver, platinum, diamonds or other precious minerals, (ii) held as
bullion or other direct forms of gold, silver, platinum or other
precious minerals, (iii) invested in instruments representing
interests in gold, silver, platinum or other precious minerals such
as certificates of deposit therefor, and/or (iv) invested in
securities of investment companies, including exchange-traded
funds, or other securities that seek to replicate the price
movement of gold, silver or platinum bullion.
ASA employs bottom-up fundamental analysis and relies on
detailed primary research, including meetings with company
executives, site visits to key operating assets, and proprietary
financial analysis in investment decisions. Investors are
encouraged to visit the ASA’s website http://www.asaltd.com/ for
additional information, including historical and current share
prices, news releases, financial statements, tax, and supplemental
information.
ASA is organized under the laws of Bermuda and is permitted to
register with the Securities and Exchange Commission as a closed
end investment company under the terms of an exemptive order issued
by the Commission in 1958. ASA is a “passive foreign investment
company” for United States federal income tax purposes. As a
result, United States shareholders holding shares in taxable
accounts are encouraged to consult their tax advisors regarding the
tax consequences of their investment in the Company’s common
shares.
About Merk
Merk Investments LLC, an SEC-registered investment adviser,
provides investment advice on liquid global markets, including
domestic and international equities, fixed income, commodities, and
currencies. For more information on Merk, please visit
www.merkinvestments.com. Merk Investments was approved as ASA’s
investment adviser on April 12, 2019 by a vote of ASA
shareholders.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of U.S. federal securities laws that are intended to be
covered by the safe harbors created thereunder. The Company’s
actual performance or results may differ from its beliefs,
expectations, estimates, goals and projections, and consequently,
investors should not rely on these forward-looking statements as
predictions of future events. Forward-looking statements are not
historical in nature and generally can be identified by words such
as “believe,” “anticipate,” “estimate,” “expect,” “intend,”
“should,” “may,” “will,” “seek,” or similar expressions or their
negative forms, or by references to strategy, plans, goals or
intentions. The absence of these words or references does not mean
that the statements are not forward-looking. The Company’s
performance or results can fluctuate from month to month depending
on a variety of factors, a number of which are beyond the Company’s
control and/or are difficult to predict, including without
limitation: the Company’s investment decisions, the performance of
the securities in its investment portfolio, economic, political,
market and financial factors, and the prices of gold, platinum and
other precious minerals that may fluctuate substantially over short
periods of time. The Company may or may not revise, correct or
update the forward-looking statements as a result of new
information, future events or otherwise.
The Company concentrates its investments in the gold and
precious minerals sector. This sector may be more volatile than
other industries and may be affected by movements in commodity
prices triggered by international monetary and political
developments. The Company is a non-diversified fund and, as such,
may invest in fewer investments than that of a diversified
portfolio. The Company may invest in smaller-sized companies that
may be more volatile and less liquid than larger more established
companies. Investments in foreign securities, especially those in
the emerging markets, may involve increased risk as well as
exposure to currency fluctuations. Shares of closed-end funds
frequently trade at a discount to net asset value. All performance
information reflects past performance and is presented on a total
return basis. Past performance is no guarantee of future results.
Current performance may differ from the performance shown.
This press release does not constitute an offer to sell or
solicitation of an offer to buy any securities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240823158540/en/
Axel Merk Chief Operating Officer (650)
376-3135 or (800) 432-3378 info@asaltd.com
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