abrdn Emerging Markets Equity Income Fund, Inc. (AEF) Announces Expiration And Preliminary Results Of Cash Tender Offer

Rhea-AI Summary

abrdn Emerging Markets Equity Income Fund (AEF) has announced the preliminary results of its cash tender offer that expired on February 20, 2025. The tender offer was for up to 10,150,355 shares, representing approximately 20% of the Fund's outstanding shares.

The offer was significantly oversubscribed, with approximately 36,731,570 shares (72.4% of outstanding stock) tendered. Due to oversubscription, shares will be purchased on a pro-rata basis, with the final purchase price set at 98% of the Fund's NAV as of February 21, 2025. The final number of shares accepted will be announced later.

Positive

• High shareholder participation with 72.4% of shares tendered, indicating strong investor interest
• Tender offer provides liquidity opportunity for shareholders at a minimal 2% discount to NAV

Negative

• Significant oversubscription means shareholders will only be able to sell a fraction of tendered shares
• 2% discount to NAV represents a direct value loss for tendering shareholders

Insights

Financial Analyst

The overwhelming response to AEF's tender offer, with 72.4% of shares tendered versus the 20% target, reveals significant shareholder appetite for liquidity. This exceptional oversubscription rate will result in a heavily pro-rated allocation, with shareholders likely receiving approximately 27.6% of their tendered shares accepted (10,150,355 shares accepted divided by 36,731,570 shares tendered).

The tender offer's structure at 98% of NAV represents an attractive exit opportunity for shareholders, particularly given that closed-end funds often trade at significant discounts to their NAV. The strong participation rate suggests shareholders are actively seeking to reduce their exposure to emerging markets or are dissatisfied with the fund's trading dynamics.

Post-tender, several key implications emerge for remaining shareholders: First, the 20% reduction in fund assets could impact the portfolio's trading flexibility and potentially increase the expense ratio as fixed costs are spread across a smaller asset base. Second, reduced market capitalization might affect trading liquidity in the secondary market. However, the tender offer could help support the share price by reducing supply and demonstrating management's commitment to addressing the discount to NAV.

For the broader closed-end fund market, this overwhelming response highlights the ongoing challenges faced by emerging market funds in maintaining investor confidence and managing persistent discounts to NAV. The execution of this tender offer represents a significant corporate action that could influence how other fund boards approach discount management strategies.

PHILADELPHIA, PA / ACCESS Newswire / February 21, 2025 / abrdn Emerging Markets Equity Income Fund, Inc. (NYSE American:AEF), a non-diversified closed-end fund, announces today the preliminary results of its cash tender for up to 10,150,355 shares, representing approximately 20% of the Fund's outstanding shares. The offer expired at 5:00 p.m. New York City time on February 20, 2025.

Based on current information, approximately 36,731,570 shares of common stock or 72.4% of the Fund's outstanding stock were tendered through the expiration date. This number is subject to adjustment and should not be regarded as final. Because the tender offer was oversubscribed, the number of shares that will be purchased by the Fund will be pro-rated based on the number of shares properly tendered by each shareholder. No more than a total of 10,150,355properly tendered shares will be accepted for payment at a price per share equal to 98% of the Fund's net asset value per share ("NAV") as of the close of regular trading on the NYSE American on February 21, 2025. The final number of shares validly tendered and accepted pursuant to the tender offer will be announced at a later date.

Important Information

The Fund's daily NYSE American closing price and NAV, as well as other information, including updated portfolio statistics and performance are available at www.abrdnaef.com or by calling the Fund's Investor Services at 1-800-522-5465.

In the United States, abrdn is the marketing name for the following affiliated, registered investment advisers: abrdn Inc., abrdn Investments Limited, and abrdn Asia Limited.

Closed-end funds are traded on the secondary market through one of the stock exchanges. A Fund's investment return and principal value will fluctuate so that an investor's shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the NAV of the fund's portfolio. There is no assurance that a Fund will achieve its investment objective. Past performance does not guarantee future results.

abrdnaef.com

# # #

For More Information Contact:

abrdn U.S. Closed-End Funds
Investor Relations
1-800-522-5465
Investor.Relations@abrdn.com

SOURCE: abrdn Emerging Markets Equity Income Fund, Inc.

View the original press release on ACCESS Newswire

FAQ

What percentage of AEF shares were tendered in the February 2025 tender offer?

Approximately 72.4% of AEF's outstanding shares (36,731,570 shares) were tendered in the offer.

How many shares will AEF purchase in the 2025 tender offer?

AEF will purchase up to 10,150,355 shares, representing 20% of the Fund's outstanding shares.

What is the purchase price for AEF's tender offer shares?

The shares will be purchased at 98% of the Fund's NAV as of February 21, 2025.

Why will AEF shareholders receive fewer shares than they tendered?

Due to the tender offer being oversubscribed (72.4% vs 20% limit), shares will be purchased on a pro-rata basis, meaning shareholders will only get a portion of their tendered shares accepted.