Magellan plays its hand, but Bolton isn’t done

afr.com:

Monday was a good day for Keybridge Capital’s Nick Bolton, but the fight isn’t over.

Street Talk can reveal the activist investor won’t be stepping back from his campaign despite Magellan’s announcement on Monday that it was considering converting the $2.65 billion global closed-end fund to an open-ended exchange-traded fund in the first half of 2024.

Keybridge Capital’s Nick Bolton. Jessica Shapiro

The news saw Magellan Global jump 4.2 per cent to $1.75 at the open on Monday to trade at an 8.8 per cent discount to the $1.92 net asset value. The narrowing of the discount put a rocket under the value of the Magellan options, which Bolton has scooped up, spiking 66 per cent to 2.5 cents on the possibility the unit price could trade above the 7.5 per cent discount.

“A conversion to open class before the options expire would be a terrific outcome for all unit holders, and Magellan should be congratulated if they can deliver that,” Bolton told Street Talk,

“If a conversion can’t be delivered in time, the resolution requested by over 100 MGF unit holders to delist and redeem the Class is the next best thing — so we will press for our meeting until something more certain turns up.

“Closing the discount is worth a lot of money to retail investors in Australia.”

Sources said Bolton’s decision to press ahead before his options expire on March 1 was likely driven by Magellan giving itself some wiggle room around the timing of the conversion, noting that Bolton had a window to dump a good chunk of his options. If he calls off the meeting, he risks the options cratering amid uncertainty.

Around 17.6 MGF options traded on Monday morning. Street Talk understands Keybridge held over 16 per cent of the options last week.

Bolton’s