CALGARY, Alberta, April 23, 2020 (GLOBE NEWSWIRE) -- Middlefield Limited (the “Manager”), the manager of European Focused Dividend Fund (“European Focused Dividend”) (TSX: EF.UN) and Global Dividend Growers Income Fund (“Global Dividend Growers”) (TSX: GDG.UN), is pleased to announce that European Focused Dividend will merge into Global Dividend Growers (“the Merger”) on or about July 14, 2020 (the date of completion being the “Effective Date”), with Global Dividend Growers being the continuing fund following the Merger.
The Manager believes that European Focused Dividend unitholders will benefit from the Merger for the following reasons:
- Reduced management fee: Upon completion of the Merger, European Focused Dividend unitholders will see a substantial management fee reduction from 1.1% to 0.85%.
- Geographic diversification: Global Dividend Growers’ investment strategy includes, but is not limited to, investing in European securities.
- Larger asset base improves liquidity and lowers costs: The Merger is expected to result in a fund with a larger market capitalization, increased trading liquidity and lower operating costs on a per unit basis than European Focused Dividend.
| About Global Dividend Growers Income Fund | |||||||||
| Global Dividend Growers is designed to provide investors with a low-cost investment in global issuers that have exhibited a history of strong dividend growth through a combination of passive and active portfolio management. Shane Obata is the lead portfolio manager of Global Dividend Growers, which has outperformed both the S&P/TSX Composite Index and its benchmark since inception, as shown in the table below: | |||||||||
| Inception Date | 1-Year | 3-Year | 5-Year | Since Inception | |||||
| Global Dividend Growers Income Fund | March 22, 2013 | -6.4% | 2.1% | 4.1% | 8.6% | ||||
| S&P/TSX Composite Index | -14.2% | -1.9% | 0.9% | 3.8% | |||||
| MSCI World Index | -9.9% | 2.5% | 3.9% | 6.4% | |||||
| Annualized total returns including reinvestment of distributions and net of fees as at March 31, 2020. | |||||||||
| Source: Bloomberg and Middlefield. | |||||||||
The Merger will be effected on a tax-deferred roll-over basis and accordingly, European Focused Dividend unitholders will not realize capital gains or losses as a result of the Merger. The Manager has determined that the Merger would be in the best interests of the unitholders of European Focused Dividend. All costs and expenses directly associated with the Merger will be borne by the Manager and not the Funds.
The Merger will be effected at an exchange ratio calculated as the net asset value per unit of European Focused Dividend divided by the net asset value per unit of Global Dividend Growers, determined as at the close of trading on the TSX on the business day immediately prior to the Effective Date. Pursuant to the Merger, Global Dividend Growers will assume the liabilities of European Focused Dividend and will issue units of Global Dividend Growers in satisfaction of the purchase price for all of the property of European Focused Dividend.
The unitholders of European Focused Dividend who do not wish to participate in the Merger can sell their units in the market or tender them for the regular annual redemption prior to the Merger. However, unitholders should be aware that by tendering units for redemption they will be exposed to pricing risk for the 20 days between the deadline to tender units and the effective date of the redemption, and that the redemption proceeds will be paid sometime in June. The deadline to tender units under this election has been extended to May 8, 2020 and surrendered units will be redeemed effective as of May 28, 2020 at a price equal to the net asset value per unit as of that date. The redemption may be considered a disposition for purposes of calculating taxable income.
In addition, European Focused Dividend is pleased to announce the remaining distributions for the second quarter of 2020 will be payable to unitholders as follows:
| Record Date | Payable Date | Distribution Per Trust Unit | |
| May 31, 2020 | June 15, 2020 | $0.05 | |
| June 30, 2020 | July 7, 2020 | $0.05 | |
After the Merger, European Focused Dividend unitholders will receive Global Dividend Growers’ monthly distribution, which is currently targeted at $0.06 per unit.
The Merger remains subject to the satisfaction of all regulatory requirements and customary closing conditions.
Units of European Focused Dividend and Global Dividend Growers trade under the symbols EF.UN and GDG.UN, respectively, on the TSX.
For further information on either of European Focused Dividend or Global Dividend Growers, including their respective annual reports and annual information forms, which outline their investment strategies and other features and attributes, please visit our website at www.middlefield.com or contact Nancy Tham or Michael Bury in our Sales and Marketing Department at 1.888.890.1868.
Certain statements in this press release may be viewed as forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, intentions, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "plans", "estimates" or "intends" (or negative or grammatical variations thereof), or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Statements which may constitute forward-looking statements relate to: the proposed timing of the Merger; the expected benefits of the Merger; and the funds that are proposed to be merged. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements including as a result of changes in the general economic and political environment, changes in applicable legislation and the performance of each fund. There are no assurances the funds can fulfill such forward-looking statements and the funds do not undertake any obligation to update such statements. Such forward-looking statements are only predictions; actual events or results may differ materially as a result of risks facing one or more of the funds, some of which are beyond the control of the funds.