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

[Libertarian666]

Now Sprott is attacking the GTU trustees for running up legal bills defending against a hostile takeover... initiated, of course, by Sprott!

"Over the first nine months of 2015, the GTU and SBT Trustees have spent in excess of US$7 million of unitholders' money on litigation they initiated and campaigns against parties seeking change at the respective funds."

(from http://www.marketwatch.com/story/sprott ... 2015-11-11)

I think they have generated a new entry for the definition of "chutzpah". 

[AdamA]

I'm going to start mailing all of the notices I get in the mail back to Sprott.

They will have to hire hundreds of new employees to manage this volume of mail.

[Phalanx]

I'm with you, AdamA. Getting pretty tired of the junk mail Sprott is sending. Was even called at home, ugh.

[AdamA]

http://m.marketwired.com/press-release/ ... 074806.htm

Maybe this is their way of trying to get Sprott to leave them alone.

[Reub]

11/26/2015

"Today, Central GoldTrust ("GoldTrust") entered into a new definitive agreement with Purpose Investments Inc. ("Purpose") regarding the conversion of GoldTrust into a gold bullion exchange traded fund ("ETF") managed by Purpose and Central Gold Managers. The proposed ETF conversion,  which is subject to unitholder approval,  has the unanimous support of your Independent Trustees and represents an exciting opportunity for GoldTrust unitholders."

"The proposed conversion is expected to immediately result in the units trading in-line with net asset value ("NAV"), to eliminate any material future discounts to NAV and provide unitholders with significantly enhanced liquidity,  consistent with other gold bullion ETFs."

"Put simply: the proposed ETF conversion represents a clearly superior alternative for all GoldTrust unitholders compared to Sprott's inadequate offer."

[dualstow]

Interesting development.

[dragoncar]

What does that mean for us?  Higher expenses?  Different taxation?

[jason]

I've owned GTU for years and I haven't been interested in the Sprott offer until now.  I bought GTU for four reasons: 1. It's in Canada, giving me at least some level of international diversification (I live in the US). 2. It's a closed end fund, which has lower tax rate than gold ETFs.  3.  In the very unlikely event gold in the US is confiscated like it was an 1933, it may not be affected and 4. I had the perception that it was less likely to be leveraged (have fractional reserves) than an ETF like GLD or IAU. 
I chose GTU over Sprott because Sprott's redemption feature can cause the fund to realize capital gains, triggering capital gains taxes that are to be absorbed by the shareholders.  GTU dos not have this issue.
Now GTU is saying they are changing over to become an ETF??  That makes little sense to me.  Anyone who was looking for an ETF would have bought IAU, GLD, etc., not GTU, right?  Am I going to lose all benefits that made me choose to buy GTU over IAU in the first place?
If so, I think I will vote to accept the Sprott offer.
But then there is a chance that both the Sprott offer and the ETF switch over could both get voted down. 
So, I am conflicted - should I vote to accept the Sprott offer, or should I just do nothing?  What I really want is to just keep GTU, with no changes.
It seems like there is a chess match going on here that I don't really understand.
Thanks!

[Libertarian666]

I just saw a notice from Fidelity that said that GTU's trustees have been replaced, effective immediately, by a board selected by a Sprott entity. Here's the relevant part of the announcement:

'GTU (US$)) announced today the removal of Brian E. Felske, Glenn C. Fox, Bruce D. Heagle, Ian M.T. McAvity, Michael A. Parente and Jason Schwandt as trustees of GoldTrust and the appointment of Marc Faber, James R. Fox, Sharon Ranson, John Wilson and Rosemary Zigrossi (the "Appointed Trustees") as trustees of GoldTrust. The removal and appointment of trustees was made pursuant to a written resolution of Sprott Asset Management Gold Bid LP, as the holder of powers of attorney from unitholders owning approximately 55.11% of the outstanding units of GoldTrust. The Appointed Trustees, in addition to J.C. Stefan Spicer, who was nominated as a trustee by Central Gold Managers Inc., the administrator of GoldTrust, shall remain trustees of GoldTrust until the next annual meeting of GoldTrust or until such trustees cease to hold office prior thereto.'

I find it very hard to believe that the unitholders realized that they were giving Sprott powers of attorney that authorized that. I also find it hard to believe that the "former trustees" are going to take this lying down, especially since I'm pretty sure that they got a court to tell Sprott they couldn't do that, as it violates Canadian security laws.

It's also not mentioned on the GTU website. I wish I had seen this earlier today so I could contact GTU and ask them what is going on.

[dragoncar]

Interesting that GTU says "The ETF Conversion is not expected to have any material adverse tax effect on GoldTrust or its unitholders and will preserve GoldTrust’s tax efficient structure"

Since I did buy some at a premium, however, I'd like the opportunity to liquidate at a premium in the future

[dragoncar]

So how are you guys votings?

[LazyInvestor]

This is getting annoying. Not sure what to do...