Adams Natural Resources Fund, Inc SC 14D9/A, filed Jun 17, 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
(Amendment No. 2)
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.
Introduction
This Amendment No. 2 (the “Amendment”) amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 (the “Statement”) originally filed with the U.S. Securities and Exchange Commission (the “SEC”) by Adams Natural Resources Fund, Inc., a Maryland corporation (the “Company”), on May 26, 2020, and amended on June 9, 2020. This Amendment relates to the tender offer by Ancora Advisors, LLC and Bulldog Investors, LLC (together, “The Bulldog-Ancora Group”), as described in the Schedule TO filed on May 15, 2020, as amended June 4, 2020, June 15, 2020, and June 16, 2020 (together, the “Bulldog-Ancora Schedule TO”), to purchase up to $70,000,000 of the Shares, for cash at a price per Share of 88% of NAV per Share, based on the NAV per Share at the close of the regular trading session of the NYSE, on June 26, 2020, net to the seller in cash, without interest upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 15, 2020, and in the related Letter of Transmittal. The tender offer relates to outstanding Common Stock, par value $0.001 per share, of Adams Natural Resources Fund, Inc.
Except as otherwise set forth below, the information set forth in the original Statement remains unchanged and is incorporated herein by reference as relevant to the items in this Amendment. Capitalized terms used but not defined herein have the meanings ascribed to them in the Statement.
Item 2. Identity and Background of Filing Person.
Item 2 is hereby amended to reflect changes to the recommendation (the “Recommendation”) of the Board of Directors (“Board”) of the Fund in connection with the new terms of the Bulldog Offer to Purchase as defined in Amendment No. 2 to the Bulldog Schedule TO dated June 15, 2020, and Amendment No. 3 to the Bulldog Schedule TO dated June 16, 2020 (collectively, the “Amended Bulldog Offer”) to (1) set a fixed price equal to 88% of NAV per Share at the close of the regular trading session of the New York Stock Exchange on June 26, 2020; (2) remove the $50 processing fee; (3) extend the Offer and withdrawal rights to expire at Midnight (one minute after 11:59 p.m.), New York City Time, on June 26, 2020, unless the Offer is extended; and (4) remove the condition that at least 4,481,187 Shares, representing 15% of Shares outstanding, be validly tendered and not withdrawn.
Item 4. The Solicitation or Recommendation.
a. Solicitation or recommendation. Item 4a is hereby amended as set forth in the Recommendation included in Exhibit (a)(3) hereto. The Board considered and discussed the Amended Bulldog-Ancora Offer on June 16, 2020. After careful consideration of the Fund’s potential responses, the Board determined that the Amended 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.
b. Reasons. The Board’s reasons for its conclusion and recommendation described above are set forth in its Recommendation included in Exhibit (a)(3) hereto. The discussion in the Recommendation 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)(3) hereto in light of its knowledge of the business, financial condition, and prospects of the Fund. 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 particular 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.
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 Offer.
Item 8. Additional Information
Item 8, “Additional Information” is hereby amended and superseded by the following:
The Statement is not an offer to sell, nor a solicitation of an offer to buy, shares of any fund. On June 16, 2020, the Fund issued a press release containing the Recommendation attached as Exhibit (a)(3) hereto relating to the Offer. The materials have also been filed with the SEC and can be found on the SEC’s website (http://www.sec.gov).
Item 9. Exhibits
Item 9, “Exhibits” is hereby amended and superseded by the following:
| Exhibit No. | Description |
| (a)(1) | Press Release issued by the Fund on May 22, 2020.* |
| (a)(2) | Transcript related to the Offer from the Conference Call held on June 8, 2020.* |
| (a)(3) | Press Release issued by the Fund on June 16, 2020, filed herewith. |
* Previously filed.
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 Compliance Officer |
Dated: June 16, 2020
Exhibit (a)(3)
Press Release
BOARD OF DIRECTORS BELIEVES THE AMENDED BULLDOG-ANCORA TENDER
OFFER IS NOT IN SHAREHOLDERS’ BEST INTERESTS
BALTIMORE, MARYLAND, June 16, 2020 —The Board of Directors of Adams Natural Resources Fund, Inc. (NYSE: PEO) has reviewed the tender offer amendments (“Offer”) made on June 15 and 16 by Bulldog Investors, LLC and Ancora Advisors, LLC (the “Group”), and remains confident that the Offer is not in long-term shareholders’ best interests. To remain a PEO shareholder, you do nothing and ignore the Offer. After careful consideration of the Offer, the Board has concluded that:
The Amended Offer is still a Bad Deal for Shareholders. The Group has asked shareholders to reconsider an offer that remains within the same price range as their initial offer that expired on June 12, 2020, and that could still be lower than the market price of shares on the pricing date. Demonstrating how bad this noncompetitive offer is, the Board is not aware of any closed-end fund tender offer that has been made at such a low price in the past ten years, based on its research.
The Group’s initial offer failed, garnering less than 5% of the outstanding shares. The Board believes the Group, with its amended Offer, is making a desperate attempt to acquire more shares. While the Group says shareholders deserve an opportunity to realize close to net asset value for their shares, tendering shareholders would receive significantly less. Shareholders overwhelmingly agreed with the Board and did not participate in the Group’s initial offer, and the Board again recommends that shareholders not participate in this amended Offer.
Shareholders Should Not Feel Pressured to Sell in Volatile Markets. The Group is conducting its hostile offer in the midst of the unprecedented COVID-19 pandemic and depressed energy markets to exploit shareholder uncertainty during this time of extreme market volatility. The Board strongly believes that tendering shares during global uncertainty is not in long-term shareholders’ best interests.
The Fund, with Its 90-year History, Provides Real Benefits to Shareholders. The Fund provides a minimum annual 6% distribution and high-quality active management that places an emphasis on risk management and positions the Fund to benefit from a rebound in energy markets, which tendering shareholders would lose. The Board strongly believes the leadership provided by the Fund’s high-quality investment team of this Morningstar 5-Star fund is extremely important in the current energy environment.
This Is A Bad Deal. To Keep Your Shares – Do Nothing.
If you want to keep your Fund shares, ignore the Offer and any messages you 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