Aurora Funds Management is extending its takeover bid for all ordinary units in the Hastings High Yield (HHY) Fund.
Unitholders will now have until September 29 to consider Aurora's offer. Aurora originally made the bid in November 2016, telling unitholders that the offer price was such that the net asset value of their units would equal the NAV of the Aurora Global Income Trust (AIB) units they would be acquiring in exchange.
Aurora, which acts as the responsible entity for both AIB and HHY, said this would provide investors with a larger managed investment scheme, which would "enhance the ability to grow the returns of the portfolio on a measured and sustainable basis."
"Additionally, by virtue of economies of scale, the enlarged fund would have the ability to reduce the per unit cost of certain fees and expenses charged to AIB unitholders on an enduring basis, as those costs will be spread across a larger unitholder base," Aurora said.
Circumstances have changed, however, in light of ASIC taking stewardship of Aurora's significant stake in Molopo Energy after the Takeovers Panel made a declaration of unacceptable circumstances. As at 20 June, AIB's investment in Molopo represented about 39% of the value of AIB's total assets.
HHY said that "there is currently an inherent uncertainty in the calculation of the NAV of AIB due to the inability of Aurora to calculate accurately the value of AIB's exposure to Molopo until such time as Molopo shares are once again quoted on ASIC and the proceedings before the panel are resolved."
Due to this uncertainty, HHY's independent chair, Jim Hallam, recommended unitholders reject the takeover offer.