Toronto-based Middlefield Group Friday announced plans to merge two of its closed-end funds.
The merger of INDEXPLUS Income Fund (TSX: IDX.UN) and INDEXPLUS Dividend Fund (TSX: IDF.UN), with INDEXPLUS Income being the continuing fund, is intended to combine two funds with substantially similar investment strategies and portfolio compositions in order to provide unitholders with the opportunity to hold units of a continuing fund that offers a larger market capitalization, increased trading liquidity and lower operating costs on a per unit basis.
All costs and expenses associated with the merger will be borne by Middlefield and not by the funds. As at June 30, INDEXPLUS Income Fund, which is co-advised by Guardian Capital LP and Middlefield Capital Corporation, has provided investors with an attractive total return since inception of more than 12% per year.
Completion of the merger is expected on December 19, and is subject to satisfying all regulatory requirements and customary closing conditions. The merger will be effected on a tax-deferred “rollover” basis at an exchange ratio calculated as the net asset value per unit of INDEXPLUS Dividend Fund divided by the net asset value per unit of INDEXPLUS Income Fund, determined as at the close of trading on the Toronto Stock Exchange on the business day immediately prior to merger date.