(Alliance News) - Asset Value Investors Ltd on Tuesday said it has published an open letter to the chair of investment firm Pershing Square Holdings Ltd expressing concern over a planned bond offering.
Asset Value Investors has been a shareholder of Pershing for over two years and currently holds a 3% stake in the company, worth over USD120 million.
Pershing shares were flat on Tuesday in London at USD18.24 each.
Asset Value Investors explained the letter to Anne Farlow follows an announcement the company plans to issue USD400 million of 20-year debt.
On Monday, FTSE 250-listed Pershing said it has launched a private placement of USD400.0 million of bonds with a coupon of 4.95%, maturing in mid-July 2039.
The bonds will be unsecured and will rank equally in right of payment with Pershing's USD1 billion 5.5% senior notes due in 2022, the company said.
Closing of the issuance and sale of the bonds is expected to be on or around Thursday next week and will be subject to customary closing conditions. Pershing intends to use the proceeds from the issuance to make investments.
On Tuesday, Asset Value Investors said: "The issue of such long-dated debt materially constrains the board's ability to manage Pershing's persistently wide discount to net asset value, at a time when doing so should be their primary focus."
Pershing Square Holdings (PSH)