Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Discussion of the Gold portion of the Permanent Portfolio

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technovelist
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by technovelist » Thu Apr 30, 2015 9:24 am

I like GTU the way it is too, but there is a lot of money out there trying to take advantage of the discount.
So this makes GTU even more of a "no-brainer" as long as it is trading at a significant discount, since eventually someone is going to buy it and eliminate the discount, which should result in "free money" for the existing unitholders!
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Pet Hog » Wed May 27, 2015 1:39 pm

Some movement on the Sprott/Goldtrust front...

Sprott Formally Launches Offers to Central GoldTrust and Silver Bullion Trust Unitholders
The number of Sprott Physical Gold Trust units to be distributed to each Central GoldTrust unitholder will be determined on a NAV to NAV basis. For example, based on the NAV per unit of Sprott Physical Gold Trust US$9.98 and Central GoldTrust US$44.36 on May 22, 2015, a unitholder would receive 4.45 Sprott Physical Gold Trust units for each Central GoldTrust unit tendered in the Offer.
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technovelist
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by technovelist » Wed May 27, 2015 2:09 pm

I'll miss GTU, but I won't mind making a few extra percent on the trade.  :P
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by buddtholomew » Wed May 27, 2015 2:19 pm

What happens if they choose not to follow through and the discount widens further?

Crazier things have happened.
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by technovelist » Wed May 27, 2015 4:20 pm

buddtholomew wrote: What happens if they choose not to follow through and the discount widens further?

Crazier things have happened.
Since I'm still accumulating, I'm not too worried about that.
However, if the discount gets wide enough, one of these takeover attempts will succeed.
The trustee nominees from the activist group got 43% support (http://www.newswire.ca/en/story/1529691 ... lation=org), so it wouldn't take much more dissatisfaction among the unitholders to overturn their stewardship, for better or worse.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by steve » Wed May 27, 2015 9:18 pm

I spoke with a Sprott representative earlier today and he could not give me one concrete reason that a take over would benefit me in the long run. We had a lengthily conversation as he wanted to know all my objections. I explained how I liked the lower expense, the fact that it trades at a big discount when gold is out of favor and I am a buyer, My opinion also is that when I am a seller which would be at a time when gold is in favor the potential for GTU to trade at a much bigger premium then Sprott which would be closer to the NAV.  GTU has traded with very high premiums in the past when gold was in favor. I was told that Sprott has intentions to let smaller unit holders redeem for gold , but as I told him intentions mean nothing nothing to me as it is not the case at present and may never be the case.  We discussed the two offers "The exchange offer alternative (the "Exchange Offer Election") and a merger (the "Merger Transaction") alternative (the "Merger Election"). He could not really give me the information that I requested, but was promised that he would get back to me. These are my questions from a US investor prospective who filed the QEF election, Situation 1 , there is an overall loss at the present time, Situation 2 there is an overall gain at present,  which option would be better, what paperwork needs to be filed and if an individual has holding in an IRA and a taxable account can one do the merger with one and the exchange offer with the other?
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by vtc » Thu May 28, 2015 5:26 pm

Sprott set up a website about the offer: http://sprottadvantage.com/
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Pointedstick » Thu May 28, 2015 5:36 pm

vtc wrote: Sprott set up a website about the offer: http://sprottadvantage.com/
Most of those supposed advantages don't actually seem like advantages to me...
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Mike59 » Sat May 30, 2015 4:14 pm

Per some of my other posts I've averaged into GTU quite nicely during the discount (I recall some days below 10% from NAV), I'm hoping this doesn't go through...

If it goes through or hits NAV before the deal I'm considering selling the GTU and moving to CEF. I figure the nice 7% or so gain I've made by buying low can be recycled and dumped into CEF, which is currently around -8% from NAV, let's do it again! I've always had a thing for silver anyway.... I'm sure the PP purists would strongly advise against this  :-X

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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by vtc » Thu Jun 04, 2015 4:39 pm

Got a call yesterday from Sprott asking if I'm aware of the offer, and confirming my address.

Also today got a message from my brokerage:

Our records indicate that you hold CENTRAL GOLDTRUST PERPET shares in your account ending in [...]. This security is subject to a(n) Exchange Offer which requires your decision. Please go to [...] to read the terms of the offer and submit your instructions or call [...] for information on the terms of the offer.
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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by vtc » Thu Jun 04, 2015 4:51 pm

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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by MachineGhost » Thu Jun 04, 2015 6:34 pm

What a bunch of B.S..  GTU has traded at a premium.  It sounds just like an excuse for Sprott to increase their gold reserves at a discount.

And GTU management themselves can buy back the shares to narrow/eliminate the discount.  Happens all the time.
Last edited by MachineGhost on Thu Jun 04, 2015 6:39 pm, edited 1 time in total.
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