The Herzfeld Caribbean Basin Fund, Inc. Commences Tender Offer for up to 5% of Outstanding Common Shares

Rhea-AI Summary

Thomas J. Herzfeld Advisors, Inc. has announced the commencement of a Tender Offer by The Herzfeld Caribbean Basin Fund, Inc. (NASDAQ: CUBA). The Fund is offering to purchase up to 5% of its outstanding common shares at 97.5% of NAV per share. The NAV will be determined as of the close of ordinary trading on the NASDAQ Capital Market on November 15, 2024.

The Tender Offer was initially announced on October 3, 2024, and the official Offer to Purchase is dated October 15, 2024. Shareholders are advised to read the Offer to Purchase, Letter of Transmittal, and related exhibits for important information. These documents are available on the SEC website and the Fund's website. For additional information, shareholders can contact EQ Fund Solutions, , the Information Agent for the Tender Offer.

Positive

• Tender Offer provides shareholders an opportunity to sell shares at a predetermined price
• Offer price set at 97.5% of NAV, potentially above current market price

Negative

• Tender Offer to only 5% of outstanding shares
• Offer price slightly below NAV at 97.5%

Insights

Financial Analyst

The Herzfeld Caribbean Basin Fund's tender offer for up to 5% of its outstanding shares at 97.5% of NAV is a strategic move that could impact the fund's structure and shareholder value. This offer provides an exit opportunity for some investors at a slight discount to NAV, which may be attractive in the current market conditions.

Key points to consider:

• The 2.5% discount to NAV could result in a small accretion to remaining shareholders if fully subscribed.
• The tender offer may help narrow the fund's trading discount to NAV if it's currently trading below NAV.
• It could potentially increase liquidity for shareholders, which is particularly important for closed-end funds.
• The impact on the fund's expense ratio and overall assets under management should be monitored, as a reduction in fund size could lead to higher expense ratios.

Investors should carefully evaluate their investment goals and the fund's prospects before deciding to participate in the tender offer. The 97.5% of NAV pricing suggests the fund management sees value in the underlying assets and is not desperate to reduce fund size.

Market Research Analyst

The Herzfeld Caribbean Basin Fund's tender offer is noteworthy in the context of the broader closed-end fund market. Such offers are often implemented to address persistent discounts to NAV or to provide liquidity in less liquid markets. For CUBA, with its relatively small market cap of $38,392,086, this move could have several implications:

• It may signal management's confidence in the fund's underlying assets and future prospects in the Caribbean Basin region.
• The offer could potentially reduce the fund's discount to NAV, if one exists, by creating temporary demand for shares.
• It provides a liquidity event for shareholders, which is particularly valuable for funds focused on less liquid markets.

Investors should consider the fund's historical performance, current market conditions in the Caribbean Basin and the potential impact on the fund's cost structure when evaluating this offer. The 5% cap on the tender offer suggests a measured approach to capital management rather than a significant restructuring of the fund.

MIAMI BEACH, Fla., Oct. 15, 2024 (GLOBE NEWSWIRE) -- Thomas J. Herzfeld Advisors, Inc., an SEC-registered investment advisor, today announced the commencement of a Tender Offer by The Herzfeld Caribbean Basin Fund, Inc. (NASDAQ: CUBA) (the “Fund”). Under the terms of the Tender Offer the Fund is offering to purchase up to 5% of outstanding shares of the Fund at 97.5% of NAV.

The Fund announced the Tender Offer in a press release on October 3, 2024.

The Fund has offered to purchase up to 5% of the currently outstanding common shares of the Fund, par value $0.001 per share (the “Common Shares”) at 97.5% of Net Asset Value (“NAV”) per Common Share (determined as of the close of ordinary trading on the NASDAQ Capital Market on November 15, 2024) for cash, upon the terms and subject to the conditions contained in the Offer to Purchase dated October 15, 2024 and the related Letter of Transmittal. Shareholders of the Fund should read the Offer to Purchase, the Letter of Transmittal and related exhibits, as they will contain important information about the Tender Offer. These and other filed documents will be available to investors for free both at the website of the Securities and Exchange Commission (www.sec.gov) and from the Fund (www.herzfeld.com/CUBA).

Requests for more information, questions and requests for additional copies of the offer materials, please contact EQ Fund Solutions, LLC, the Information Agent for the Tender Offer, at (877) 536-1555.

About Thomas J. Herzfeld Advisors, Inc.

Thomas J. Herzfeld Advisors, Inc., founded in 1984, is an SEC registered investment advisor, specializing in investment analysis and account management in closed-end funds. The Firm also specializes in investment in the Caribbean Basin. The HERZFELD/CUBA division of Thomas J. Herzfeld Advisors, Inc. serves as the investment advisor to The Herzfeld Caribbean Basin Fund, Inc. a publicly traded closed-end fund (NASDAQ: CUBA).

More information about the advisor can be found at www.herzfeld.com.

Past performance is no guarantee of future performance. An investment in the Fund is subject to certain risks, including market risk. In general, shares of closed-end funds often trade at a discount from their net asset value and at the time of sale may be trading on the exchange at a price which is more or less than the original purchase price or the net asset value. There can be no assurance that any Share repurchases will reduce or eliminate the discount of the Fund’s market price to the Fund’s net asset value per share. An investor should carefully consider the Fund’s investment objective, risks, charges and expenses. Please read the Fund’s disclosure documents before investing.

Forward-Looking Statements

This press release, and other statements that Thomas J. Herzfeld Advisors, Inc. (“TJHA”) or the Fund may make, may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to the Fund’s or TJHA’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. TJHA and the Fund caution 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 TJHA and the Fund assume no duty to and do 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 Fund, 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, particularly with respect to Cuba and other Caribbean Basin countries, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for the Fund or in the Fund’s net asset value; (2) the relative and absolute investment performance of the Fund 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, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and regulatory, supervisory or enforcement actions of government agencies relating to the Fund or TJHA, as applicable; (8) terrorist activities, international hostilities and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or TJHA or the Fund; (9) TJHA’s and the Fund’s ability to attract and retain highly talented professionals; (10) the impact of TJHA 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; and (12) the effects of an epidemic, pandemic or public health emergency, including without limitation, COVID-19. Annual and Semi-Annual Reports and other regulatory filings of the Fund with the SEC are accessible on the SEC’s website at www.sec.gov and on TJHA’s website at www.herzfeld.com/cuba, and may discuss these or other factors that affect the Fund. The information contained on TJHA’s website is not a part of this press release.

Contact:
Tom Morgan
Chief Compliance Officer
Thomas J. Herzfeld Advisors, Inc.
1-305-777-1660

FAQ

What is the Tender Offer price for CUBA stock?

The Herzfeld Caribbean Basin Fund (CUBA) is offering to purchase shares at 97.5% of Net Asset Value (NAV) per Common Share, determined as of the close of ordinary trading on the NASDAQ Capital Market on November 15, 2024.

How many shares is CUBA offering to purchase in the Tender Offer?

The Herzfeld Caribbean Basin Fund (CUBA) is offering to purchase up to 5% of its currently outstanding common shares in the Tender Offer.

When does the Tender Offer for CUBA stock expire?

The press release does not specify an expiration date for the Tender Offer. Shareholders should refer to the Offer to Purchase dated October 15, 2024, for complete details, including the offer expiration date.

Where can shareholders find more information about CUBA's Tender Offer?

Shareholders can find more information about the Tender Offer on the SEC website (www.sec.gov), the Fund's website (www.herzfeld.com/CUBA), or by contacting EQ Fund Solutions, , the Information Agent, at (877) 536-1555.