Redemption Features Add Complexity, Risk,
Cost and Uncertainty to an Already Deficient Proposal
Time to Act is Now – Join the Majority Who
Have Tendered to the Sprott Offer for Central GoldTrust
Sprott Asset Management LP (“Sprott” or “Sprott Asset
Management”), together with Sprott Physical Gold Trust (NYSE:PHYS)
(TSX:PHY.U), today commented on the recent filing of the
information circular by Central GoldTrust (“GTU”) (TSX: GTU.UN,
GTU.U) (NYSEMKT:GTU) in connection with its proposed ETF
conversion.
John Wilson, CEO of Sprott Asset Management, said, “It is
abundantly clear that the redemption features announced today will
destroy value for GTU unitholders. The features are also entirely
hypocritical to the position that the Trustees took when
unitholders requested enhanced redemption features earlier this
year. With these proposals, GTU unitholders face a prisoners
dilemma of either exiting the investment and potentially incurring
significant tax bills, or remaining in the fund and shouldering
increased fees and potential tax burdens. It is clear that the
Trustees would prefer to cripple the fund and have investors leave
rather than accept Sprott’s offer.”
Mr. Wilson continued, “Sprott is offering GTU unitholders value
and certainty. The Trustees of GTU are only offering more
complexity, uncertainty, risks and costs. We urge unitholders not
to be fooled by this smokescreen and tender to Sprott’s offer
immediately.”
Soliciting Dealer Information
Sprott is committed to providing GTU and Silver Bullion Trust
(“SBT”) (TSX: SBT.UN, SBT.U) unitholders with an opportunity to own
a superior product. In order to reach these unitholders, as is
common in transactions with a large retail base, Sprott has agreed
to pay to each soliciting dealer a solicitation fee of US$0.1358
per GTU unit and US$0.0448 per SBT unit deposited through such
soliciting dealer if such unit is either (i) taken-up and paid for
under the applicable Sprott offer, or (ii) provided the Merger
Transaction (as defined in the applicable Sprott offer) is
completed, deemed to be withdrawn from the applicable Sprott offer
under the Merger Election (as defined in the applicable Sprott
offer), subject to a minimum fee of US$50.00 and a maximum fee of
US$1,500.00 with respect to each beneficial unitholder of GTU or
SBT and a minimum deposit of 300 GTU units or 1,000 SBT units.
Where units deposited and registered in a single name are
beneficially owned by more than one person, only one minimum and
maximum amount will be applied.
Sprott Private Wealth LP is acting as dealer manager for the
soliciting dealer groups in Canada, which groups will consist of
members of the Investment Industry Regulatory Organization of
Canada and the Toronto Stock Exchange. Sprott Global Resource
Investments, Ltd. is acting as dealer manager for the soliciting
dealer groups in the United States, which groups will consist of
members of the Financial Industry Regulatory Authority.
Inquiries regarding the soliciting dealer groups may be directed
to Glen Williams, Director of Communications for the Sprott Group
at 1-416-943-4394.
GTU and SBT unitholders who have questions regarding Sprott’s
offers for GTU and SBT (collectively, the “Sprott offers”), are
encouraged to contact Sprott Unitholders’ Service Agent, Kingsdale
Shareholder Services, at 1-888-518-6805 (toll free in North
America) or at 1-416-867-2272 (outside of North America) or by
e-mail at contactus@kingsdaleshareholder.com.
For more information, unitholders can visit
www.sprottadvantage.com.
Additional Details of the Sprott Offers
Each Sprott offer is subject to conditions, including, but not
limited to, the number of GTU or SBT units (as applicable) in
respect of which an Exchange Offer Election or Merger Election (as
such terms are defined in the Sprott offers) has been made,
together with the number of GTU or SBT units (as applicable) held
as of the Expiry Time (as such term is defined in the Sprott
offers) by or on behalf of Sprott, if any, representing at least 66
2/3% of the then issued and outstanding GTU or SBT units (as
applicable); the receipt of all necessary governmental or
regulatory approvals; no material adverse change in relation to GTU
or SBT; GTU, SBT and the Sprott Physical Gold Trust and Sprott
Physical Silver Trust (together with Sprott Physical Gold Trust,
the “Sprott Physical Trusts”) not being prohibited by applicable
law from completing the Merger Transactions (as such term is
defined in the Sprott offers); and no litigation or regulatory
order that may jeopardize the Sprott offers, as described in the
Offer Documents (as defined below).
Each Sprott offer is open for acceptance until 5:00 p.m.
(Toronto time) on December 7, 2015, unless extended or withdrawn.
Concurrently with each of the Sprott offers and as contemplated
under the declaration of trust of each of GTU and SBT, written
consents, by way of a power of attorney granted to Sprott,
requiring the approval of the holders of at least 66 2/3% of the
GTU units and of the SBT units, respectively, are being solicited
as part of the letter of transmittal to, among other things,
authorize a qualifying exchange as part of the relevant Merger
Transaction with Sprott Physical Gold Trust and Sprott Physical
Silver Trust, respectively; replace the trustees of GTU and SBT
(other than administrator nominees), respectively, with nominees to
be designated by Sprott; and amend the declaration of trust of each
of GTU and SBT to provide that GTU and SBT units shall be
redeemable on demand at NAV and to reduce the tender required for a
compulsory acquisition to 66 2/3%. In order for units of GTU or SBT
to be tendered to the Sprott offers, a depositing unitholder will
be required to provide the written consent referred to above and
appoint Sprott, or an affiliate thereof, as its attorney and proxy
holder for, among other things, the purposes of redeeming such
unitholder’s units of GTU or SBT, as applicable, and executing a
written resolution to replace certain of the trustees of GTU and
SBT.
Full details of each Sprott offer are set out in a takeover bid
circular and accompanying offer documents (collectively, and as
amended by the Notice of Extension and Variation dated June 22,
2015, the Notice of Extension and Variation dated July 7, 2015, the
Notice of Extension and Variation dated August 4, 2015, the Notice
of Change dated August 18, 2015, the Notice of Change dated August
28, 2015, the Notice of Variation dated September 4, 2015, the
Notice of Extension dated September 18, 2015, the Notice of
Extension and Variation dated October 9, 2015, the Notice of
Extension dated November 2, 2015, the Notice of Variation dated
November 4, 2015, the Notice of Extension and Change dated November
20, 2015 and as further extended and varied, the “Offer
Documents”), which have been filed with the Canadian securities
regulatory authorities. In connection with each Sprott offer, the
applicable Sprott Physical Trust has also filed with the U.S.
Securities and Exchange Commission (the “SEC”) a registration
statement on Form F-10 (each, as amended, a “Registration
Statement”), which contains a prospectus relating to the applicable
Sprott offer (each a “Prospectus”). Sprott and Sprott Physical Gold
Trust have also filed a tender offer statement on Schedule TO (the
“Schedule TO”) with respect to the Sprott offer for GTU. This news
release is not a substitute for the Offer Documents, the
Prospectuses, the Registration Statements or the Schedule TO.
GTU AND SBT UNITHOLDERS AND OTHER INTERESTED PARTIES ARE URGED
TO READ THESE DOCUMENTS, ALL DOCUMENTS INCORPORATED BY REFERENCE,
ALL OTHER APPLICABLE DOCUMENTS AND ANY AMENDMENTS OR SUPPLEMENTS TO
ANY SUCH DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE EACH
CONTAINS OR WILL CONTAIN IMPORTANT INFORMATION ABOUT SPROTT, THE
SPROTT PHYSICAL TRUSTS, GTU, SBT AND THE SPROTT OFFERS. Materials
filed with the Canadian securities regulatory authorities are
available electronically without charge at www.sedar.com. Materials
filed with the SEC are available electronically without charge at
the SEC’s website at www.sec.gov.
Important Notice
This news release does not constitute an offer to buy or the
solicitation of an offer to sell any of the securities of GTU, SBT,
Sprott Physical Gold Trust or Sprott Physical Silver Trust. The
Sprott offers are being made solely pursuant to the Offer
Documents. The securities registered pursuant to a Registration
Statement are not offered for sale in any jurisdiction in which
such offer or sale is not permitted.
Cautionary Statement Regarding Forward-Looking
Information
This news release contains “forward-looking statements” and
“forward-looking information” (collectively, “forward-looking
information”) within the meaning of applicable Canadian and United
States securities legislation. Forward-looking information includes
information that relates to, among other things, the intentions of
Sprott and the Sprott Physical Trusts and future financial and
operating performance and prospects, statements with respect to the
anticipated timing, mechanics, success, completion and settlement
of the Sprott offers and the proposed ETF conversions, the tax
consequences of the proposed ETF conversions including in
connection with any subsequent redemptions, the anticipated
redemptions following any ETF conversion, the anticipated U.S.
market for the proposed ETFs following any conversion, the value of
the units of Sprott Physical Gold Trust and Sprott Physical Silver
Trust received as consideration under the Sprott offers, reasons to
accept the Sprott offers, the purposes of the Sprott offers, our
ability to complete the transactions contemplated by the Sprott
offers or replace the trustees of GTU and SBT, the completion of
the Merger Transactions, the outcome of any litigation or
regulatory proceedings surrounding the Sprott offers, our ability
to replace certain trustees of GTU and SBT prior to completion of
the applicable Sprott offer and any commitment to acquire GTU and
SBT units, our objectives, strategies, intentions, expectations and
guidance and future financial and operating performance.
Forward-looking information is not, and cannot be, a guarantee of
future results or events. Forward-looking information is based on,
among other things, opinions, assumptions, estimates and analyses
that, while considered reasonable by us at the date the
forward-looking information is provided, are inherently subject to
significant risks, uncertainties, contingencies and other factors
that may cause actual results and events to be materially different
from those expressed or implied by the forward-looking information.
The material factors or assumptions that Sprott and the Sprott
Physical Trusts identified and applied in drawing conclusions or
making forecasts or projections set out in the forward-looking
information include, but are not limited to, the execution of
business and growth strategies, including the success of
investments and initiatives; no significant and continuing adverse
changes in general economic conditions or conditions in the
financial markets; the acquisition of all of the issued and
outstanding units of, or substantially all of the assets and
liabilities of, GTU and SBT; that all required regulatory approvals
for the Sprott offers will be obtained and all other conditions to
completion of the Sprott offers will be satisfied or waived. The
risks, uncertainties, contingencies and other factors that may
cause actual results to differ materially from those expressed or
implied by the forward-looking information may include, but are not
limited to the risks discussed under the heading “Risk Factors” in
each of the Sprott Physical Trusts’ most recent annual information
forms and other documents filed with Canadian and U.S. securities
regulatory authorities. Should one or more risk, uncertainty,
contingency or other factor materialize or should any factor or
assumption prove incorrect, actual results could vary materially
from those expressed or implied in the forward-looking information.
Accordingly, the reader should not place undue reliance on
forward-looking information. Neither Sprott nor either Sprott
Physical Trust assumes any obligation to update or revise any
forward-looking information after the date of this news release or
to explain any material difference between subsequent actual events
and any forward-looking information, except as required by
applicable law.
Information Concerning GTU and SBT
Except as otherwise expressly indicated herein, the information
concerning GTU and SBT contained in this news release has been
taken from and is based solely upon GTU’s and SBT’s public
disclosure on file with the relevant securities regulatory
authorities. Neither GTU nor SBT has reviewed this document or
confirmed the accuracy and completeness of the information in
respect of GTU or SBT contained in this news release. Although
neither Sprott nor the Sprott Physical Trusts have any knowledge
that would indicate that any information or statements contained in
this news release concerning GTU or SBT taken from, or based upon,
such public disclosure contain any untrue statement of a material
fact or omit to state a material fact that is required to be stated
or that is necessary to make a statement not misleading in light of
the circumstances in which it was made, none of Sprott, either
Sprott Physical Trust or any of their respective trustees,
directors or officers has verified, nor do they assume any
responsibility for, the accuracy or completeness of such
information or statements or for any failure by GTU or SBT to
disclose events or facts which may have occurred or which may
affect the significance or accuracy of any such information or
statements but which are unknown to Sprott and the Sprott Physical
Trusts. Sprott and the Sprott Physical Trusts have no means of
verifying the accuracy or completeness of any of the information
contained herein that is derived from GTU’s and SBT’s publicly
available documents or records or whether there has been any
failure by GTU or SBT to disclose events that may have occurred or
may affect the significance or accuracy of any information.
About Sprott Asset Management LP
Sprott Asset Management LP is the investment manager to the
Sprott Physical Trusts. Important information about each of the
Sprott Physical Trusts, including its investment objectives and
strategies, applicable management fees, and expenses, is contained
in the current annual information form for each of the Sprott
Physical Trusts, which can be found on its website, in the U.S. on
www.sec.gov and in Canada on www.sedar.com. Commissions, management
fees, or other charges and expenses may be associated with
investing in the Sprott Physical Trusts. Investment funds are not
guaranteed, their values change frequently and past performance may
not be repeated. To learn more about Sprott Physical Gold Trust or
Sprott Physical Silver Trust, please visit
sprottphysicalbullion.com.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151207005987/en/
Glen WilliamsSprott GroupDirector of CommunicationsDirect:
416-943-4394orFor Canadian Media:Kingsdale Shareholder ServicesIan
RobertsonVice President, CommunicationsDirect: 416-867-2333 or
Cell: 647-621-2646orFor U.S. Media:Sard Verbinnen & CoDan
Gagnier / Pat Scanlan212-687-8080
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