Since our initial writeup, the company has extended the exchange offer not once, but twice. The current expiration date is now listed as Wednesday, October 10th, however please check with your individual brokerages to see if you need to respond at an earlier time or date. A mere 464K shares were tendered by September 4th, however demand has since ticked up as 1.1m shares were tendered as of September 18th. One possible reason for the sudden increase could be due to the fact that the offer’s minimum requirement of 4.75m shares was since waived. One no longer had to worry about tendering and not getting filled.
It seems that so far, most shareholders are content to follow Mr. Jonas’ lead and hang onto the potential in the company’s shale assets. The allure of high yields in this environment must be strong though and it looks like these preferreds will outyield Preferred ETF’s like PFF and PGX although I am not sure how the risk profiles of the ETF’s constituents compare to GNE. My feelings on this situation are unchanged.
The reason I stress ‘so far’ is that although tendered shares can be pulled back, many brokerages will not release their intent to tender shares until much closer to the real deadline. As a result, the final number could be much higher.
Disclosure: Author currently holds shares of GNE.