Check your RVT rights

[Sandy & Shirley]

On May 18 RVT gave rights to those who owned or will own RVT on May 30. Basically, for every 10 shares you owned on May 30 you could buy 1 share on July 3 for $.25 less than the closing price on July 3.

My rights were exercised yesterday. The closing price of RVT was $15.58 and the shares I had rights to were purchased for $16.41!

Offering the rights pushed the price up to $16.66 on May 21 and for some reason they used that price, not “$0.25 below the last reported sale price per share on the New York Stock Exchange on July 3, 2018” as stated by the offer!

There is a (i) next to that comment on the offer on their website, https://www.roycefunds.com/news/2018/05/rvt-common-stock-rights-offering-terms
but the footnotes are not published on that page. Not sure what they are up to.

When I check my holdings last night I got a Red Flag because my IRA account’s cash holdings went negative by a few cents, which is not legal!

My broker agrees that something is wrong, this is just to let everyone know that they should double check their RVT holdings and double check with your brokers! The rights price should have been $15.33, not $16.41!

 

[Running_Man]

I do not hold shares in this fund at present time, having sold them along with all other stock holdings earlier in the year. Here is the prospectus RVT: Royce Value Trust Fund Prospectus 497 Filling
In there you can see the preliminary price is $16.41 and the cost to base the subsription of rights offering, which expired at end of June and on July 6th when shares will be issued you they will issue the shares at the lower price and I assume return the funds to you.

 

[Sandy & Shirley]

Note sure where you are getting July 6th, the link you posted has the same quote as the link I posted:


Subscription Price
The Subscription Price for all Shares issued pursuant to the Offer will be the lower of (i) $0.25 below the last reported sale price per Share on the NYSE on the Expiration Date (currently July 3, 2018) or (ii) the NAV per Share on that date. See “The Offer — Subscription Price.”

 

[Running_Man]

(1) Assumes that all Rights issued as part of the Primary Subscription are exercised at the estimated Subscription Price (but excludes the effect of the Fund’s exercise of its over-allotment option). The Fund may, through the exercise of its over-allotment option, increase the number of Shares subject to subscription by up to 20%, or up to an additional 1,705,295 Shares, for an aggregate total of 10,231,768 Shares. If the Fund exercises its over-allotment option and all Over-Allotment Shares are sold, the proceeds, before expenses, to the Fund will be approximately $167,903,313.
(2) Because the Subscription Price will not be determined until after the printing and distribution of this Prospectus, the “Estimated Subscription Price” above ($16.41 per Share) is an estimate based upon the Fund’s last reported sale price per Share on the NYSE on May 21, 2018 (i.e., $16.66 per Share) and the Fund’s NAV per Share on that date (i.e., $17.84 per Share).
(3) The Rights are being offered by the Fund directly to Stockholders without the services of an underwriter.
(4) Offering expenses borne by the Fund are estimated to be approximately $545,000 in the aggregate. Assuming that all Rights issued as part of the Primary Subscription are exercised but excluding the effect of the Fund’s exercise of its over-allotment option, the per Share and total proceeds to the Fund after deduction of such expenses are estimated at approximately $16.35 and $139,374,422, respectively. If the Fund exercises its over-allotment option and all Over-Allotment Shares are sold, the per Share and total proceeds to the Fund after deduction of such expenses are estimated at approximately $16.36 and $167,358,313, respectively. Offering expenses will be borne by the Fund and indirectly by all of its Stockholders, including those who do not exercise their Rights. Accordingly, such expenses will immediately reduce the NAV per Share of the Fund.
__________
The Fund is a diversified, closed-end management investment company. The Fund’s investment goal is long-term capital growth. The Fund normally invests at least 65% of its assets in the equity securities of small- and micro-cap companies, generally those with stock market capitalizations ranging from $100 million to $3 billion, that Royce & Associates, LP (“Royce”), the Fund’s investment adviser, believes are trading below its estimate of their current worth. The Fund also may invest up to 25% of its assets in securities of issuers headquartered outside the United States. The Fund may invest a portion of its assets in companies with stock market capitalizations in excess of $3 billion.

The Shares issuable pursuant to the Offer will be ready for delivery on or about July 6, 2018 (in the event the final subscription price is lower than the estimated subscription price) or July 24, 2018 (in the event the final subscription price is higher than the estimated subscription price).

 

[Sandy & Shirley]

So, since the “final subscription price”, July 3 close of $15.58 minus $.25 equals $15.33, “is lower than the estimated subscription price”, $16.41, “the share should be ready for delivery on or about July 6”. And, hopefully that means that there will be a rebate of $1.08 per share in my accounts tomorrow along with the shares that were exercised.

 

[Running_Man]

That is what I would expect probably in the day or two after due to settlement delays