Hennessy Advisors (HNNA) – Odd Lot Tender – $43 guaranteed return

Current Price – $24.57;

Offer Price – $25;

Upside – 2% or $43 (for odd lot holders);

Expiration date –  18 Sep 2015;

SEC Filling



Hennessy Advisors, Inc., a California corporation, invites its shareholders to tender up to $25.0 million in aggregate value of its Common Stock, no par value per share, for purchase by Hennessy Advisors, Inc., at a price of $25.00 per Share, net to the seller in cash. As of August 19, 2015, the Company had 6,025,381 Shares outstanding. At the Purchase Price of $25.00 per Share, we could purchase 1,000,000 Shares if the Offer is fully subscribed, which would represent approximately 17% of the Company’s outstanding Shares as of August 19, 2015.


No proration for Odd Lot holders:

For purposes of the Offer, the term “odd lots” means all Shares properly tendered that are held by a shareholder who owns beneficially or of record an aggregate of fewer than 100 Shares, which we refer to as an “odd lot holder,” and so certifies in the appropriate place on the Letter of Transmittal and, if applicable, the Notice of Guaranteed Delivery. To qualify for this preference, an odd lot holder must tender all Shares owned beneficially or of record by the odd lot holder in accordance with the procedures described in Section 3. As set forth above, odd lots will be accepted for payment before proration, if any, of the purchase of other tendered Shares. This preference is not available to partial tenders or to beneficial or record holders of an aggregate of 100 or more Shares, even if these holders have separate accounts or certificates representing fewer than 100 Shares. By accepting the Offer, an odd lot holder who holds Shares in his or her name and tenders his or her Shares directly to the Depositary would not only avoid the payment of brokerage commissions, but also would avoid any applicable odd lot discounts in a sale of the holder’s Shares. Any odd lot holder wishing to tender all of such odd lot holder’s Shares pursuant to the Offer should complete the box entitled “Odd Lots” in the Letter of Transmittal and, if applicable, the Notice of Guaranteed Delivery.


Source of Funds:

The Offer is not subject to any financing condition. Assuming the Offer is fully subscribed, we expect the aggregate purchase price for the Shares, together with related fees and expenses, to be approximately $25.3 million. We plan to fund any purchase of Shares pursuant to the Offer, including the related fees and expenses, using available cash and borrowings under our Credit Facility (as defined below). We have no alternative financing arrangements or plans relating to the Offer other than those described herein.

We have an outstanding bank loan with U.S. Bank National Association with an outstanding principal balance of $23.3 million. We have received a commitment letter from U.S. Bank National Association under which U.S. Bank has committed to enter into a new term loan agreement for $35.0 million (the “Credit Facility”) that will replace our current credit facility.