13 July 2021
Third Point Investors Limited
Response to Shareholder Communication
As previously announced, the Board of Directors (“Board”) of Third Point Investors Limited (“TPIL” or the “Company”), a Guernsey company, has been in receipt of a communication (the “Communication”) from four shareholders seeking to requisition an Extraordinary General Meeting of the Company. As detailed below, the Board has sought extensive counsel on the Communication and has been clearly and consistently advised that the resolution proposed in the Communication would fall under the legal definition of “ineffective” and, consequently, will not be holding this meeting.
Guernsey Law Prevents the Resolution as Filed from Being Enacted and it is, as such, “Ineffective”
Section 203 of the Companies (Guernsey) Law, 2008 (the “Law”), requires the Company to convene a general meeting if requisitioned to do so by shareholders holding more than 10 per cent. of the capital of the Company carrying the right to vote at such meeting, provided that the notice of requisition “…must state the general nature of the business to be dealt with at the meeting…” and “… include the text of a resolution that may be properly moved…at the meeting”. For these purposes, a resolution may be properly moved at a meeting unless, among other things, “…it would, if passed, be ineffective (whether by reason of inconsistency with any enactment of the company's memorandum or articles or otherwise)…”.
The Board is charged with managing the Company under Article 132 of its Articles of Incorporation, and shareholders are not permitted under the Articles and the Law to enforce any particular action upon the Company by way of an ordinary resolution. Shareholders have the right to amend the Articles and thereby require the Board to follow a particular course of action, but only through a special resolution, which under the Law requires the affirmative vote of 75% of eligible shares.
Since it has been determined that the proposed resolution, even if approved, would inappropriately infringe on the Board’s ability and obligation to manage the Company, it would have no legal effect and therefore the Board has determined that convening the meeting would constitute a poor use of Company resources.
The Board continues to welcome input and views from all shareholders. As previously announced, the Board has taken meaningful steps to reduce the trading discount of the shares. The strong investment performance of the Investment Manager, combined with the discount control mechanisms already put into place, have together resulted in:
The share price increasing 86% over the last 12 months, and 28% year-to-date, both as at 12 July 2021,
12th place ranking out of the AIC’s universe of 354 Investment Company Share Classes by one-year share price returns as at 9 July 2021 (excluding VCTs),
The share price rising to an all-time high, and
A meaningful reduction in the share price discount to NAV to approximately 12% as at 12 July 2021.
In addition, the Board believes that the exchange facility approved at the AGM last week will have a further positive impact.
Finally, the Board already has wide powers to return capital to shareholders and has exercised these in a manner which it believes is in the interests of shareholders as a whole. The Board acknowledges that differing views exist amongst the shareholder base, with some shareholders appreciating that long-term NAV growth and effective discount controls present an attractive investment proposition whilst others would prefer an immediate exit of their position at or close to NAV. The Board’s actions to date reflect its belief that TPIL provides access in the London market to Third Point, a talented investment manager with a unique investment strategy that is otherwise unavailable to a wide range of investors. The actions proposed in the Communication are not new suggestions and the Board considered them in its strategic review prior to its April 1 announcement. They were rejected by the Board for various reasons, including principally that the Board determined such actions would, over time, meaningfully reduce the trading float and overall size of the Company, which would render it significantly less attractive to investors and threaten its long-term viability. The Board firmly believes that the process of discount management is a matter of pursuing a consistent policy over a period of years and the ongoing programme of measures is being established in accordance with that goal.
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Notes to Editors
About Third Point Investors Limited
Third Point Investors Limited (LSE: TPOU) was listed on the London Stock Exchange in 2007 and is a feeder fund that invests in the Third Point Offshore Fund (the Master Fund), offering investors a unique opportunity to gain direct exposure to founder Daniel S. Loeb’s investment strategy. The Master Fund employs an event-driven, opportunistic strategy to invest globally across the capital structure and in diversified asset classes to optimize risk-reward through a market cycle. TPIL’s portfolio is 100% aligned with the Master Fund, which is Third Point’s largest hedge fund. TPIL’s assets under management are currently $1.0 billion.
About Third Point LLC
Third Point LLC is an institutional investment manager that actively engages with companies across their lifecycle, using dynamic asset allocation and an ethos of continuous learning to drive long-term shareholder return. Led by Daniel S. Loeb since its inception in 1995, the Firm has a 34-person investment team, a robust quantitative data and analytics team, and a deep, tenured business team. Third Point manages approximately $17.1 billion in assets for sovereign wealth funds, endowments, foundations, corporate & public pensions, high-net-worth individuals, and employees.