Templeton Dragon Fund, Inc. (“TDF”) Announces Expiration of Self-Tender Offer

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Templeton Dragon Fund (TDF) Announces Preliminary Results of Issuer Tender Offer

Financial Analyst

The issuer tender offer conducted by Templeton Dragon Fund, where a significant portion of its outstanding shares were tendered, reflects a strategic move that could potentially impact the fund's liquidity and market dynamics. The fact that approximately 70.96% of the Fund's common shares were tendered, exceeding the offer for 25% of the shares, indicates a strong shareholder response, which could be interpreted as a desire for liquidity or a lack of confidence in the fund's future performance. The tender offer at 98% of the NAV may result in an immediate cash inflow for shareholders but could also affect the fund's net asset value in the short term.

Investors should consider the potential for share price volatility following the tender offer, as the market adjusts to the reduced number of shares in circulation and the fund's altered capital structure. The long-term implications will depend on how the fund's management reinvests the repurchased capital and whether this move aligns with the fund's stated investment strategies and objectives.

Industry Analyst

In the context of closed-end funds, the Templeton Dragon Fund's tender offer is a noteworthy event, especially given the fund's focus on investments in China, Hong Kong and Taiwan. These regions are associated with higher risks, such as political and economic uncertainties, which are accentuated in the current global trade climate. The fund's performance and the shareholder response to the tender offer should be evaluated against the backdrop of these regional risks, as well as the broader economic environment.

It is also important to recognize that closed-end funds like Templeton Dragon Fund trade on the secondary market, which can lead to prices that deviate from NAV. This tender offer could narrow the discount or premium at which the fund's shares trade relative to its NAV. Investors should monitor the fund's discount/premium trends post-tender offer for insights into market sentiment and the perceived value of the fund's underlying investments.

Investment Management Expert

The tender offer's impact on the fund's asset under management (AUM) should be closely observed, as it could signal strategic shifts in portfolio management. With Franklin Templeton's extensive global operations and investment expertise, the outcome of this tender offer could influence the parent company's reputation and, by extension, its other managed funds. The management's ability to navigate the post-tender offer landscape will be critical in maintaining investor confidence, especially considering the specialized nature of the fund's focus on emerging markets.

Furthermore, the fund's active management approach will be put to the test as it seeks to balance the dual objectives of capital growth and shareholder value maximization. The outcomes of such tender offers can serve as a litmus test for the management's investment decisions and overall strategy, impacting investor perception and potentially influencing future inflows into the fund.

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)-- Templeton Dragon Fund [NYSE: TDF] (the “Fund”), today announced the preliminary results of its issuer tender offer to purchase for cash up to 8,451,035 of its common shares, representing 25% of its issued and outstanding common shares.

The tender offer expired at 5:00 p.m. New York City time, on Wednesday, December 20, 2023. Based on current information, approximately 23,989,011 common shares, or approximately 70.96% of the Fund’s common shares outstanding, were tendered through the expiration date. This total includes shares tendered pursuant to notices of guaranteed delivery. Accordingly, on a pro rata basis, approximately 35.22% of Shares for each stockholder who properly tendered Shares have been accepted for payment. The final number of shares validly tendered and accepted pursuant to the tender offer will be announced at a later date.

The Fund expects to make cash payments for tendered and accepted shares at a price equal to 98% of the Fund’s net asset value (“NAV”) per share as of the close of trading on December 20, 2023. Payment for shares tendered and accepted is expected to be sent to tendering shareholders within approximately 5 business days after the expiration date.

The offer to purchase and other documents filed by the Fund with the U.S. Securities and Exchange Commission (the “SEC”), including the Fund's annual report for the fiscal year ended December 31, 2022, are or will be available without cost at the SEC’s website (sec.gov) or by calling the Fund’s Information Agent at (866) 828-6931.

Other information

You may request a copy of the Fund’s current Annual and Semi-Annual Reports to Shareholders by contacting Franklin Templeton’s Fund Information Department at 1-800/DIAL BEN® (1-800-342-5236) or by visiting franklintempleton.com. All investments involve risks, including possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. There are special risks associated with investments in China, Hong Kong and Taiwan, including less liquidity, expropriation, confiscatory taxation, international trade tensions, nationalization, and exchange control regulations and rapid inflation, all of which can negatively impact the Fund. Investments in Taiwan could be adversely affected by its political and economic relationship with China. The Fund is actively managed, but there is no guarantee that the manager's investment decisions will produce the desired results. For portfolio management discussions, including information regarding the Fund’s investment strategies, please view the most recent Annual or Semi-Annual Report to Shareholders which can be found at franklintempleton.com or sec.gov.

Unlike open-end funds (mutual funds), closed-end funds are not continuously offered. Closed-end funds trade on the secondary market through a national stock exchange at a price which may be above (a premium), but is often below (a discount to) the net asset value (NAV) of the fund's portfolio. Unlike a mutual fund, the market price for a closed-end fund is based on supply and demand, not the fund's NAV.

Franklin Resources, Inc. is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,300 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.4 trillion in assets under management as of November 30, 2023. For more information, please visit franklintempleton.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231221150356/en/

Franklin Templeton, 1-800-342-5236

Source: Templeton Dragon Fund, Inc.

FAQ

What are the preliminary results of Templeton Dragon Fund's issuer tender offer?

The preliminary results indicate that approximately 23,989,011 common shares, or approximately 70.96% of the Fund’s common shares outstanding, were tendered through the expiration date.

What is the expected price for tendered and accepted shares?

The Fund expects to make cash payments for tendered and accepted shares at a price equal to 98% of the Fund’s net asset value (NAV) per share as of the close of trading on December 20, 2023.

Where can I find the documents filed by Templeton Dragon Fund with the SEC?

The offer to purchase and other documents filed by the Fund with the U.S. Securities and Exchange Commission (the “SEC”) are or will be available without cost at the SEC’s website (sec.gov) or by calling the Fund’s Information Agent at (866) 828-6931.

What are the special risks associated with investments in the Templeton Dragon Fund?

International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. There are special risks associated with investments in China, Hong Kong, and Taiwan, including less liquidity, expropriation, confiscatory taxation, international trade tensions, nationalization, and exchange control regulations and rapid inflation, all of which can negatively impact the Fund.

What is the mission of Franklin Templeton?

Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management, and technology solutions.