Adams Natural Resources Fund, Inc SC 14D9, filed Jul 16, 2020
Adams Natural Resources Fund, Inc. (PEO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
ADAMS NATURAL RESOURCES FUND, INC.
(Name of Subject Company)
ADAMS NATURAL RESOURCES FUND, INC.
(Name of Person(s) Filing Statement)
Common Stock, par value $0.001 per share
(Title of Class of Securities)
00548F105
(CUSIP Number of Class of Securities)
500 East Pratt Street, Suite 1300
Baltimore, Maryland 21202
(410) 752-5900
(Address, including Zip Code, and Telephone Number, including Area Code, of
Registrant's Principal Executive Offices)
Janis F. Kerns
General Counsel, Corporate Secretary and
Chief Compliance Officer
Adams Natural Resources Fund, Inc.
500 East Pratt Street, Suite 1300
Baltimore, Maryland 21202
(410) 752-5900
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of the Person(s) Filing Statement)
COPY TO:
Michael D. Mabry
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103
(215) 564-8000
¨ Check the box if the filing relates solely to preliminary communications made before the commencement of a Tender Offer.
| Item 1. | Subject Company Information. |
The name of the subject company to which this Solicitation/Recommendation Statement on Schedule 14D-9 (together with the Exhibits hereto, this “Statement”) relates is Adams Natural Resources Fund, Inc., a Maryland corporation. The address of the principal executive offices of Adams Natural Resources Fund, Inc. is 500 East Pratt Street, Suite 1300, Baltimore, Maryland 21202. The telephone number of the principal executive offices of Adams Natural Resources Fund, Inc. is (410) 752-5900. The title of the subject class of equity securities to which this Schedule 14D-9 relates is Common Stock at a par value of $0.001 per share (“Shares”). As of March 31, 2020, there were 29,777,752 Shares issued and outstanding.
| Item 2. | Identity and Background of Filing Person. |
The filing person is the subject company. The Fund's name, business address and business telephone number are set forth in Item 1 above.
This Statement relates to the tender offer by Bulldog Investors, LLC and Ancora Advisors, LLC (together, “The Bulldog-Ancora Group”), as described in the Schedule TO filed on July 10, 2020 (the “Bulldog-Ancora Schedule TO”), to purchase up to $40,000,000 of the Shares, for cash at a price per Share of 90% of NAV per share, based on the NAV per Share at the close of the regular trading session of the NYSE, on the Expiration Date, as defined in the Bulldog-Ancora Schedule TO, net to the seller in cash, without interest upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 10, 2020 (the “Bulldog-Ancora Offer to Purchase”), and in the related Letter of Transmittal (which, together with the Bulldog-Ancora Offer to Purchase, constitute the “Bulldog-Ancora Offer”). The tender offer relates to outstanding Common Stock, par value $0.001 per share, of Adams Natural Resources Fund, Inc.
According to the Bulldog-Ancora Schedule TO, the business address of Bulldog Investors, LLC is Park 80 West—Plaza Two, 250 Pehle Avenue, Suite 708, Saddle Brook, NJ 07663, and the business telephone number is (201) 556-0092.
| Item 3. | Past Contacts, Transactions, Negotiations and Agreements. |
There are no material agreements, arrangements, understandings, or any actual or potential conflicts of interest between the Fund or its affiliates and (1) the Fund, its executive officers, directors or affiliates or (2) The Bulldog-Ancora Group or their executive officers, directors or affiliates.
| Item 4. | The Solicitation or Recommendation. |
a. Solicitation or recommendation. The Board of Directors (“Board”) of the Fund considered and discussed the Bulldog-Ancora Offer on July 13, 2020. After careful consideration of the Fund's potential responses, the Board determined that the Bulldog-Ancora Offer was not in the best interests of shareholders and unanimously determined to recommend that the Fund's shareholders reject the Bulldog-Ancora Offer and not tender their Shares to the Bulldog-Ancora Group.
The following discussion of the information and factors considered by the Board is not meant to be exhaustive, but includes material information, factors and analyses considered by the Board in reaching its conclusions and recommendations. The members of the Board evaluated the various factors listed in its Recommendation included in Exhibit (a)(1) hereto in light of its knowledge of the business, financial condition, and prospects of the Fund and based upon the advice of independent legal counsel. In light of the number and variety of factors that the Board considered, the members of the Board did not find it practicable to assign relative weights to the foregoing factors. The Board’s recommendations were made after considering the totality of the information and factors involved. In addition, individual members of the Board may have given different weight to different factors.
b. Reasons. The Board’s reasons for its conclusion and recommendation described above are set forth in its Recommendation included in Exhibit (a)(1) hereto.
c. Intent to tender. To the best knowledge of the Fund, none of its Directors, executive officers, affiliates, or subsidiaries currently intends to tender Shares held of record or beneficially by such person for purchase pursuant to the Bulldog-Ancora Offer.
| Item 5. | Person/Assets, Retained, Employed, Compensated or Used |
The Fund does not currently anticipate directly or indirectly employing, retaining, or compensating any party to make solicitations or recommendations in connection with the Bulldog-Ancora Offer.
| Item 6. | Interest in Securities of the Subject Company |
During the past 60 days, Kathleen T. McGahran, the Fund’s non-executive Chair of the Board, purchased 2,000 Shares of the Fund at an average price of $11.43 on July 1, 2020, and 2,196 Shares at an average price of $11.33 on July 2, 2020. The Fund is not aware of any other transactions with respect to the Shares that have been effected by the Fund or, to the Fund's knowledge, by any of its executive officers, other Directors, affiliates or subsidiaries.
| Item 7. | Purposes of the Transaction and Plans or Proposals |
The Fund and its Board have not undertaken and are not currently engaged in any negotiation with The Bulldog-Ancora Group in response to the Bulldog-Ancora Offer. However, the Board continually considers all strategic alternatives available to the Fund and the Fund reserves the right to develop and evaluate other alternatives to the Bulldog-Ancora Offer.
| Item 8. | Additional Information |
The Statement is not an offer to sell, nor a solicitation of an offer to buy, shares of any fund. On July 14, 2020, the Fund issued a press release containing the Recommendation attached as Exhibit (a)(1) hereto relating to the proposed Bulldog-Ancora Offer. The materials have also been filed with the SEC and can be found on the SEC's website (http://www.sec.gov).
| Item9. | Exhibits |
| Exhibit No. |
Description |
| (a)(1) | Press Release issued by the Fund on July 14, 2020, filed herewith. |
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
ADAMS NATURAL RESOURCES FUND, INC.
By:/s/ Janis F. Kerns
--------------------------------------
Name: Janis F. Kerns
Title: General Counsel, Corporate Secretary and
Chief C ompliance Officer
Dated: July 15, 2020
Exhibit (a)(1)
Press Release
BOARD OF DIRECTORS BELIEVES THE NEW BULLDOG-ANCORA TENDER OFFER IS NOT IN SHAREHOLDERS’ BEST INTERESTS
BALTIMORE, MARYLAND, July 14, 2020 —The Board of Directors of Adams Natural Resources Fund, Inc. (NYSE: PEO) has reviewed the tender offer (“Offer”) made on July 10 by Bulldog Investors, LLC and Ancora Advisors, LLC (the “Group”), and believes that the Offer is not in long-term shareholders’ best interests. To remain a PEO shareholder, do nothing and ignore the Offer. After careful consideration of the Offer, the Board has concluded that:
The New Offer is Another Bad Deal for Shareholders
The Group is conducting a series of offers designed to buy the most shares at the lowest price possible. The Offer price is very
close to the current market price – and shareholders could receive a price lower than the market price on the pricing
date. The Offer repeats the Group’s tired playbook of making the lowest offer possible for your shares. While the Group says
shareholders deserve an opportunity to realize close to net asset value (NAV) for their shares, tendering shareholders would receive
significantly less.
The Bad Deal for Shareholders is a Good Deal for Them
Why is the Group offering to buy your shares? The Board believes they are attempting to buy at low prices to obtain the power to
get the full NAV for themselves. The Group states they want to liquidate the Fund, which could cause shareholders to lose their
steady annual income payments and miss out on a rebound in energy prices. The Board believes the Group’s self-serving methods
do not benefit long-term shareholders.
The Fund, with Its 90-year History, Provides Real Benefits
to Shareholders
The Fund provides a 6% minimum annual distribution and is Morningstar
5-Star rated. Its high-quality, active management places an
emphasis on risk control and positions the Fund to benefit from a rebound in energy markets. The Fund’s high, long-term
correlation between NAV and market price returns remains consistent. Tendering shareholders would lose these important benefits.
Shareholders overwhelmingly agreed with the Board and did not participate in the Group’s failed prior offer, and the Board again recommends that shareholders not participate in this new Offer.
This Is A Bad Deal. To Keep Your Shares – Do Nothing
If you want to keep your Fund shares, ignore the Offer and any requests to participate you may receive from your broker. No action is required.
Since 1929, Adams Funds has consistently helped generations of investors reach their investment goals. Adams Funds is comprised of two closed-end funds, Adams Diversified Equity Fund, Inc. (NYSE: ADX) and Adams Natural Resources Fund, Inc. (NYSE: PEO). The Funds are actively managed by an experienced team with a disciplined approach and have paid dividends for more than 80 years across many market cycles. The Funds are committed to paying an annual distribution rate of 6% or more, providing reliable income to long-term investors. Shares can be purchased through our transfer agent or through a broker. For more information about Adams Funds, please visit: adamsfunds.com.
Contact:
Lyn
Walther │ Director
of Shareholder Communications │800.638.2479
│investorrelations@adamsfunds.com
500 East Pratt Street, Suite 1300, Baltimore, MD 21202 │ 410.752.5900 │ 800.638.2479 │ adamsfunds.com