BlackRock Announces Withdrawal of Municipal Closed-End Fund Merger Proposals
31 10월 2023 - 8:00AM
Business Wire
- An activist hedge fund is opposing the mergers to further its
own short-term agenda, causing unsustainable proxy solicitation
costs should the mergers proceed
- The withdrawal occurs despite strong support from retail
shareholders who have benefitted from 48 BlackRock closed-end fund
mergers since 2010
- All shareholders were expected to benefit from the mergers in
the form of higher income, a higher after-tax yield, lower expenses
(excluding interest expense) and improved secondary market
trading
The Boards of Directors/Trustees of BlackRock MuniYield Michigan
Quality Fund, Inc. (NYSE: MIY), BlackRock MuniYield Pennsylvania
Quality Fund (NYSE: MPA), BlackRock Virginia Municipal Bond Trust
(NYSE: BHV), BlackRock Investment Quality Municipal Trust, Inc.
(NYSE: BKN) and BlackRock MuniYield Quality Fund III, Inc. (NYSE:
MYI) (each, a “Fund” and collectively, the “Funds”) today announced
the withdrawal of merger proposals that were previously approved by
the Boards pursuant to which each of MIY, MPA, BHV and BKN would
have been merged into MYI, with MYI continuing as the surviving
Fund.
While the mergers would have created economies of scale for the
Funds and benefited shareholders, the Board of Directors/Trustees
of each Fund determined that the proxy solicitation process and its
associated costs would be substantially more burdensome and more
expensive as a result of opposition from the activist shareholder.
Because of the increased burden and cost, the Board of
Directors/Trustees of each Fund has determined that the mergers are
no longer in the best interests of each Fund’s shareholders. As a
result, each Fund will continue to operate as a standalone fund
pursuant to its current investment objectives and policies, and
shareholders of each Fund will remain shareholders of their current
Fund.
Despite the clear benefits of the proposed mergers to all
shareholders, particularly retail shareholders who comprise 78% to
89% of the shareholder base of the target Funds, a self-interested
minority activist shareholder recently filed proxy statements
opposing the proposed mergers, which removes certain voting options
for shareholders, in an effort to suppress the voice of retail
investors.
The potential benefits to common shareholders of the target
Funds had the mergers been completed (based on information as of
July 31, 2023 for a shareholder of 1,000 shares) include:
- Higher income ranging from $8 to $260 per year
- Higher after-tax yield ranging from $58 to $352 per
year
- Lower expenses (excluding interest expense) ranging from
$8 to $114 per year
- Increased trading volume in a fund that would be
approximately $1.7 billion in net assets with combined trading
volume of $3.4 million per day
About BlackRock
BlackRock’s purpose is to help more and more people experience
financial well-being. As a fiduciary to investors and a leading
provider of financial technology, we help millions of people build
savings that serve them throughout their lives by making investing
easier and more affordable. For additional information on
BlackRock, please visit www.blackrock.com/corporate
Availability of Fund Updates
BlackRock will update performance and certain other data for the
Funds on a monthly basis on its website in the “Closed-end Funds”
section of www.blackrock.com as well as certain other material
information as necessary from time to time. Investors and others
are advised to check the website for updated performance
information and the release of other material information about the
Funds. This reference to BlackRock’s website is intended to allow
investors public access to information regarding the Funds and does
not, and is not intended to, incorporate BlackRock’s website in
this release.
Forward-Looking Statements
This press release, and other statements that BlackRock or the
Funds may make, may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act, with
respect to the Funds or BlackRock’s future financial or business
performance, strategies or expectations. Forward-looking statements
are typically identified by words or phrases such as “trend,”
“potential,” “opportunity,” “pipeline,” “believe,” “comfortable,”
“expect,” “anticipate,” “current,” “intention,” “estimate,”
“position,” “assume,” “outlook,” “continue,” “remain,” “maintain,”
“sustain,” “seek,” “achieve,” and similar expressions, or future or
conditional verbs such as “will,” “would,” “should,” “could,” “may”
or similar expressions.
BlackRock cautions that forward-looking statements are subject
to numerous assumptions, risks and uncertainties, which change over
time. Forward-looking statements speak only as of the date they are
made, and BlackRock assumes no duty to and does not undertake to
update forward-looking statements. Actual results could differ
materially from those anticipated in forward-looking statements and
future results could differ materially from historical
performance.
With respect to the Funds, the following factors, among others,
could cause actual events to differ materially from forward-looking
statements or historical performance: (1) changes and volatility in
political, economic or industry conditions, the interest rate
environment, foreign exchange rates or financial and capital
markets, which could result in changes in demand for the Funds or a
Fund’s net asset value; (2) the relative and absolute investment
performance of the Funds and its investments; (3) the impact of
increased competition; (4) the unfavorable resolution of any legal
proceedings; (5) the extent and timing of any distributions or
share repurchases; (6) the impact, extent and timing of
technological changes; (7) the impact of legislative and regulatory
actions and reforms, and regulatory, supervisory or enforcement
actions of government agencies relating to the Funds or BlackRock,
as applicable; (8) terrorist activities, international hostilities,
health epidemics and/or pandemics and natural disasters, which may
adversely affect the general economy, domestic and local financial
and capital markets, specific industries or BlackRock; (9)
BlackRock’s ability to attract and retain highly talented
professionals; (10) the impact of BlackRock electing to provide
support to its products from time to time; and (11) the impact of
problems at other financial institutions or the failure or negative
performance of products at other financial institutions.
Annual and Semi-Annual Reports and other regulatory filings of
the Funds with the Securities and Exchange Commission (“SEC”) are
accessible on the SEC's website at www.sec.gov and on
BlackRock’s website at www.blackrock.com, and may discuss
these or other factors that affect the Funds. The information
contained on BlackRock’s website is not a part of this press
release.
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