The offer prospectus at item 8 says they will use "cash on hand and proceeds from the sale of portfolio securities..." to pay those who tender.
It may be overly simplistic, but it seems to me if the fund is purchasing shares at 95% of NAV, when in the open market it could buy for less (current discount is about 9%), it can only hurt the overall value of the fund. It also seems to me that the open market discount should start narrowing toward the 5% as the tender end date draws near, otherwise there would be a clear arbitrage opportunity.
If I understand the offer they are offering 95% of NAV which today is 6.65 so you would get 6.31 This is assuming a static situation until june 18.
But they are paying .05/shr as a dividend so we are looking at getting approx. 6moths of dividend early and then not own the stock. To me it is not worth doing that I will hold on to the stock and collect my monthly 50$ on my 1000 shares. That is my take on what I currently know for what it is worth. Not sure why they are doing this but it looks to me the people who will benefit most are those that keep their shares.
I don't understand why the stock hasn't gone up in light of the tender offer terms. Buy here with a chance to cash in in a few weeks with a tender price higher. No guarantee your shares will be taken but still attractive in light of todsy's stock price.