Citadel Fund Administration LP, the administrator of the Citadel Group of Funds, one of Canada’s largest managers of closed end funds, Friday issued a response to Thursday’s announcement by Brompton Administration Ltd. and Bloom Investment Counsel, Inc. that they are soliciting unitholder support for a potential requisition of special meetings of certain of the Citadel Funds.

Toronto-based Bompton and Bloom are asking unitholders of seven Citadel Funds to actively come forward to support their demand for special meetings of those funds to l to replace Crown Hill Fund as administrator and merge the Citadel funds.

The funds are:

• Citadel Diversified Investment Trust (TSX: CTD.UN);
• Citadel S-1 Income Trust Fund (TSX: SDL.UN);
• Citadel HYTES Fund (TSX: CHF.UN);
• Citadel SMaRT Fund (TSX: CRT.UN);
• Series S-1 Income Fund (TSX: SRC.UN);
• Citadel Stable S-1 Income Fund (TSX: CSR.UN); and;
• Citadel Premium Income Fund (TSX: CPF.UN).

“Brompton and Bloom believe that this proposal will substantially benefit the merging funds and their unitholders,” the companies said in a release..

In response, Citadel stated, “It is highly unusual for a fund administrator to take an action such as this to seek to have itself appointed as administrator of unrelated funds and raises issues as to the motivation of Brompton and its proposed investment manager, Bloom.”

Citadel said it plans to issue a more detailed response after consulting its lawyers and the Independent Review Committee for the funds.

In the meantime, the company urged unitholders not to take any action in relation to the Brompton announcement until Citadel has had an opportunity to respond.

Independently of the Brompton announcement, Citadel Thursday called for special meetings of unitholders of certain of the funds to be held on September 3 at which meetings unitholders will be given the opportunity to consider and vote upon the merger of these funds with a continuing fund.

Detailed information on the proposed merger and its merits, including the experience and expertise of the new external portfolio manager for the continuing fund, the overall investment strategy of the continuing fund, and a special redemption option, will be communicated at a later date.

“The notice of the special meetings will contain details of the IRC’s recommendation to Citadel about its proposals,” Citadel said.

Calgary-based Citadel is one of Canada’s largest managers of closed end funds.

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