Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Pet Hog » Wed May 27, 2015 1:39 pm

Some movement on the Sprott/Goldtrust front...

Sprott Formally Launches Offers to Central GoldTrust and Silver Bullion Trust Unitholders
The number of Sprott Physical Gold Trust units to be distributed to each Central GoldTrust unitholder will be determined on a NAV to NAV basis. For example, based on the NAV per unit of Sprott Physical Gold Trust US$9.98 and Central GoldTrust US$44.36 on May 22, 2015, a unitholder would receive 4.45 Sprott Physical Gold Trust units for each Central GoldTrust unit tendered in the Offer.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Wed May 27, 2015 2:09 pm

I'll miss GTU, but I won't mind making a few extra percent on the trade.  :P
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by buddtholomew » Wed May 27, 2015 2:19 pm

What happens if they choose not to follow through and the discount widens further?

Crazier things have happened.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Wed May 27, 2015 4:20 pm

buddtholomew wrote: What happens if they choose not to follow through and the discount widens further?

Crazier things have happened.
Since I'm still accumulating, I'm not too worried about that.
However, if the discount gets wide enough, one of these takeover attempts will succeed.
The trustee nominees from the activist group got 43% support (http://www.newswire.ca/en/story/1529691 ... lation=org), so it wouldn't take much more dissatisfaction among the unitholders to overturn their stewardship, for better or worse.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by steve » Wed May 27, 2015 9:18 pm

I spoke with a Sprott representative earlier today and he could not give me one concrete reason that a take over would benefit me in the long run. We had a lengthily conversation as he wanted to know all my objections. I explained how I liked the lower expense, the fact that it trades at a big discount when gold is out of favor and I am a buyer, My opinion also is that when I am a seller which would be at a time when gold is in favor the potential for GTU to trade at a much bigger premium then Sprott which would be closer to the NAV.  GTU has traded with very high premiums in the past when gold was in favor. I was told that Sprott has intentions to let smaller unit holders redeem for gold , but as I told him intentions mean nothing nothing to me as it is not the case at present and may never be the case.  We discussed the two offers "The exchange offer alternative (the "Exchange Offer Election") and a merger (the "Merger Transaction") alternative (the "Merger Election"). He could not really give me the information that I requested, but was promised that he would get back to me. These are my questions from a US investor prospective who filed the QEF election, Situation 1 , there is an overall loss at the present time, Situation 2 there is an overall gain at present,  which option would be better, what paperwork needs to be filed and if an individual has holding in an IRA and a taxable account can one do the merger with one and the exchange offer with the other?
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by vtc » Thu May 28, 2015 5:26 pm

Sprott set up a website about the offer: http://sprottadvantage.com/
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Pointedstick » Thu May 28, 2015 5:36 pm

vtc wrote: Sprott set up a website about the offer: http://sprottadvantage.com/
Most of those supposed advantages don't actually seem like advantages to me...
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Mike59 » Sat May 30, 2015 4:14 pm

Per some of my other posts I've averaged into GTU quite nicely during the discount (I recall some days below 10% from NAV), I'm hoping this doesn't go through...

If it goes through or hits NAV before the deal I'm considering selling the GTU and moving to CEF. I figure the nice 7% or so gain I've made by buying low can be recycled and dumped into CEF, which is currently around -8% from NAV, let's do it again! I've always had a thing for silver anyway.... I'm sure the PP purists would strongly advise against this  :-X

Vote NO! 
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by vtc » Thu Jun 04, 2015 4:39 pm

Got a call yesterday from Sprott asking if I'm aware of the offer, and confirming my address.

Also today got a message from my brokerage:

Our records indicate that you hold CENTRAL GOLDTRUST PERPET shares in your account ending in [...]. This security is subject to a(n) Exchange Offer which requires your decision. Please go to [...] to read the terms of the offer and submit your instructions or call [...] for information on the terms of the offer.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by vtc » Thu Jun 04, 2015 4:51 pm

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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by MachineGhost » Thu Jun 04, 2015 6:34 pm

What a bunch of B.S..  GTU has traded at a premium.  It sounds just like an excuse for Sprott to increase their gold reserves at a discount.

And GTU management themselves can buy back the shares to narrow/eliminate the discount.  Happens all the time.
Last edited by MachineGhost on Thu Jun 04, 2015 6:39 pm, edited 1 time in total.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Fri Jun 05, 2015 10:08 am

MangoMan wrote: Maybe I'm not fully understanding this tender offer vs the Polar takeover, but what would be the downside to doing the NAV to NAV swap to Sprott, selling the shares to capture the gain, and then repurchasing GTU later if the whole trust doesn't get taken over?
Nothing, assuming that your transaction doesn't tip over the result to having GTU be taken over when it wouldn't otherwise.
That's a pretty small risk for most unit-holders.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Fri Jun 05, 2015 11:33 am

By the way, I have been informed of the exchange offer by Fidelity. There is a 100+ page document about it, which I'm not going to read right away...
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Mon Jun 08, 2015 10:02 am

MangoMan wrote:
Libertarian666 wrote:
MangoMan wrote: Maybe I'm not fully understanding this tender offer vs the Polar takeover, but what would be the downside to doing the NAV to NAV swap to Sprott, selling the shares to capture the gain, and then repurchasing GTU later if the whole trust doesn't get taken over?
Nothing, assuming that your transaction doesn't tip over the result to having GTU be taken over when it wouldn't otherwise.
That's a pretty small risk for most unit-holders.
So you are recommending accepting the tender offer [and planning on doing so with your own shares]?
I'm still thinking about it.
I don't see a lot of downside other than having my shares tied up for a month while they try to get 2/3rds. And actually I can revoke my acceptance during that time if some terrible emergency came up and I needed the money.
Of course, if I knew that the offer was going to be successful, I'd buy some more shares and tender them too, as long as there is still a significant discount, but of course no one knows that until the end (except maybe Sprott).
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by steve » Mon Jun 08, 2015 12:04 pm

The Board of directors at GTU recommends that unit holders do nothing until they properly evaluate the offer. Which they will, after that, act in what you think is in your best interest.  For me personally I see no long term advantage to Sprott only disadvantages. 
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Mon Jun 08, 2015 1:00 pm

steve wrote: The Board of directors at GTU recommends that unit holders do nothing until they properly evaluate the offer. Which they will, after that, act in what you think is in your best interest.  For me personally I see no long term advantage to Sprott only disadvantages.
I would also prefer that GTU stay the way it is, but I don't have much control over that.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by steve » Tue Jun 09, 2015 9:20 am

Central GoldTrust Files Trustees' Circular and Recommends That Unitholders REJECT the Sprott Offer, TAKE NO ACTION and DO NOT TENDER Their Units to the Sprott Offer
"After a thorough review of the Sprott Offer, and following the receipt of advice from its financial, tax and legal advisors, and the UNANIMOUS recommendation of the members of the Special Committee of Independent Trustees, the Board of Trustees of GoldTrust reached the conclusion that the Sprott Offer is opportunistic and not in the best interests of GoldTrust and its Unitholders.




Unitholders who have already tendered their Units to the Sprott Offer can withdraw their Units by contacting their broker or D.F. King & Co., North America Toll-Free at 1-800-251-7519



http://www.gold-trust.com/Press%20Relea ... 0Final.pdf
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Tue Jun 09, 2015 10:32 am

steve wrote: Central GoldTrust Files Trustees' Circular and Recommends That Unitholders REJECT the Sprott Offer, TAKE NO ACTION and DO NOT TENDER Their Units to the Sprott Offer
"After a thorough review of the Sprott Offer, and following the receipt of advice from its financial, tax and legal advisors, and the UNANIMOUS recommendation of the members of the Special Committee of Independent Trustees, the Board of Trustees of GoldTrust reached the conclusion that the Sprott Offer is opportunistic and not in the best interests of GoldTrust and its Unitholders.




Unitholders who have already tendered their Units to the Sprott Offer can withdraw their Units by contacting their broker or D.F. King & Co., North America Toll-Free at 1-800-251-7519



http://www.gold-trust.com/Press%20Relea ... 0Final.pdf
Of course they would say that, since they will lose their cushy low-to-no work jobs "managing" a fund that doesn't require any management.
This is not to say they aren't right, just that they aren't unbiased.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by dragoncar » Tue Jun 09, 2015 1:22 pm

Libertarian666 wrote:
steve wrote: Central GoldTrust Files Trustees' Circular and Recommends That Unitholders REJECT the Sprott Offer, TAKE NO ACTION and DO NOT TENDER Their Units to the Sprott Offer
"After a thorough review of the Sprott Offer, and following the receipt of advice from its financial, tax and legal advisors, and the UNANIMOUS recommendation of the members of the Special Committee of Independent Trustees, the Board of Trustees of GoldTrust reached the conclusion that the Sprott Offer is opportunistic and not in the best interests of GoldTrust and its Unitholders.




Unitholders who have already tendered their Units to the Sprott Offer can withdraw their Units by contacting their broker or D.F. King & Co., North America Toll-Free at 1-800-251-7519



http://www.gold-trust.com/Press%20Relea ... 0Final.pdf
Of course they would say that, since they will lose their cushy low-to-no work jobs "managing" a fund that doesn't require any management.
This is not to say they aren't right, just that they aren't unbiased.
This is all a conspiracy to generate fees for Bennett Jones LLP, CIBC World Markets, and Dentons Canada LLP
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Tue Jun 09, 2015 1:36 pm

As I have said, the trustees are going to have to do something about the discount if they don't want a future takeover to succeed. Apparently they know that too, as indicated in this quote from the circular:

Ian McAvity, Lead Independent Trustee commented: “The Trustees understand that the unusually elevated discounts to
NAV at which GoldTrust Units have recently traded are of concern to investors; however, Sprott’s opportunistic offer is
not  the  solution.  We  are  actively  considering  a  number  of  potential  measures,  including  possible  amendments  to  the
existing cash redemption feature  of GoldTrust,  which could potentially reduce future  trading price  discounts to NAV.
Among the factors guiding the Trustees' analysis of such measures are the accessibility of any amended features to all
Unitholders,  the  necessity  that  any  such  measures  be  accretive  to  non-redeeming  Unitholders  and  the  potential  tax
liabilities to Unitholders in connection therewith.”
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Mon Jun 15, 2015 10:08 am

Ok, I've decided not to tender my units, after reading the message from the trustees. It looks like Sprott is trying to pull a fast one by bypassing the normal governance rules for the trust and misrepresenting what they are actually asking the unitholders to do, and I don't like dealing with people like that.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by MachineGhost » Mon Jun 15, 2015 11:56 am

Libertarian666 wrote: Ok, I've decided not to tender my units, after reading the message from the trustees. It looks like Sprott is trying to pull a fast one by bypassing the normal governance rules for the trust and misrepresenting what they are actually asking the unitholders to do, and I don't like dealing with people like that.
Was I right or was I right?  :P
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by dragoncar » Mon Jun 15, 2015 12:30 pm

MachineGhost wrote:
Libertarian666 wrote: Ok, I've decided not to tender my units, after reading the message from the trustees. It looks like Sprott is trying to pull a fast one by bypassing the normal governance rules for the trust and misrepresenting what they are actually asking the unitholders to do, and I don't like dealing with people like that.
Was I right or was I right?  :P
I'm surprised anyone would have "already tendered" their units.  Tech, what were the pros in your analysis?
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Libertarian666 » Mon Jun 15, 2015 12:37 pm

dragoncar wrote:
MachineGhost wrote:
Libertarian666 wrote: Ok, I've decided not to tender my units, after reading the message from the trustees. It looks like Sprott is trying to pull a fast one by bypassing the normal governance rules for the trust and misrepresenting what they are actually asking the unitholders to do, and I don't like dealing with people like that.
Was I right or was I right?  :P
I'm surprised anyone would have "already tendered" their units.  Tech, what were the pros in your analysis?
There really is only one "pro", namely being able to cash out in the near future at NAV or nearly so, and even that is not guaranteed given the terms of the offer, as the trustees have pointed out.

Since I don't need to cash out any time in the foreseeable future, and in fact am buying more GTU, that isn't very compelling. :P
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by HB Reader » Mon Jun 15, 2015 9:55 pm

Well, all of my GTU holdings are in retirement accounts so I plan to accept the tender offer.  I have no tax issues.  I have always tried to buy gold as directly as possible.  Over many years, the problem of the dearth of viable gold retirement account vehicles became one of the more vexing problems I experienced sticking with the PP as retirement accounts came to dominate my holding "spaces". 

I don't particularly like Sprott, but whether they or anyone else make a "huge" profit on the deal is irrelevant to me.  I may well end up transferring the holdings over to one of the major gold ETFs.

I have bought GTU several times over the years simply because it occasionally traded at a substantial discount to spot gold and I believed it to be very safe (from a fraud perspective).  I doubt it will every trade at much of a premium again since there are so many other vehicles of relatively recent advent that trade at NAV and can be traded easily in "normal" brokerage accounts.

Basically, this offer is what I've been waiting to happen. 



     
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