The record date that does not decide who is paid

Apollo Commercial Real Estate Finance is liquidating, and on Friday it declared its first payment: $4.10 a share, on shares that closed the same day at $6.24. The release names a record date, Tuesday 20 October, and a payment date, Thursday 29 October. In an ordinary dividend the record date settles who is paid. Here it does not. A holder on the register who sells on Wednesday 21 October hands the $4.10 to the buyer, and a buyer on Wednesday 28 October, eight days after the record date, receives it by holding through the next day’s close. The mechanism is called a due bill, and this issue works through it on a position the author holds.

The lesson

How a due bill moves the ex-date to the day after payment

Every cash distribution has three dates. The record date is the day the company reads its register. The payment date is the day the money goes out. The ex-date is the first day the shares trade without the payment attached, and it is the only one of the three that matters to someone buying or selling. US shares settle one business day after the trade, so for an ordinary dividend the ex-date is the record date itself: a purchase the day before reaches the register in time, and a purchase on the day does not.

That works when the dividend is a percent or two of the price. When the payment is most of the price, the same rule would leave the shares trading for days at a fraction of their old value with the cash not yet paid. So the exchange moves the ex-date to the first business day after the payment date, and for the days in between every share trades with an IOU attached, a claim on the payment that travels from seller to buyer. That IOU is the due bill.

Set the dates and the price side by side:

Three holders, three outcomes. One: a holder who bought by Monday 19 October and still holds at the close on 29 October is on the register on the record date and is paid by the company directly. Two: a holder who is on the register on 20 October and sells on any day from 20 to 29 October is still the name the company pays, because the register is read once. The due bill then obliges that seller’s broker to pass the $4.10 on to the buyer. The release says such holders “will be selling their right to the Initial Liquidating Distribution”. Three: a buyer on any day from 20 to 29 October who holds through the close on the 29th was never on the register and receives the $4.10 anyway, through the due bill, having paid a price that still included it.

The release puts the whole thing in one line: “if an investor wishes to receive the Initial Liquidating Distribution, the investor will need to hold its shares of common stock through and including the Payment Date.” It also says the company “has no obligation for either the amount of the due bill or the processing of the due bill.” The transfer happens between brokers, not at the company.

This goes wrong in three ways, and each starts from a habit that is right for ordinary dividends. The first is reading the record date as a deadline to buy. Issue #3 showed that a record date counts settled shares, which is true here too, and it still does not decide who ends up with the cash. The second is reading the record date as a finish line: a holder who sees their name on the register on the 20th and sells on the 21st has sold the $4.10 with the shares. The third is the screen on Friday 30 October, which will show the shares down by about two thirds overnight. That is the payment leaving the price, the same shape as Kip McGrath’s ex-dividend drop in the last issue, only far larger.

For the same reason the payment is not a discount anyone can collect. Until the close on 29 October the price carries the $4.10, so a buyer pays for it in full and gets it back three weeks later. What a buyer at $6.24 is really paying for is the part that comes after:

The last row is arithmetic on the proxy’s range, not a company figure: the release does not restate the total, and says only that further returns are “subject to payment of the Company’s liabilities and obligations and the creation of associated reserves.” The proxy had put the first payment at $3.70–4.00 within about 30 days of the vote. It came in at $4.10, payable exactly 30 days after the 29 September approval. Editor’s view: the stub that trades from 30 October is the harder half of this position, because what remains is an estimate with a liquidating trust at the end of it.

One thing the release cannot say is what a broker does with a payment like this for a holder outside the United States. The proxy warns that such holders “may be subject to U.S. withholding taxes with respect to liquidating distributions”. Whether the account shows the full $1,230.00 on 29 October, and on which day, goes in the broker record below once it has happened. Author holds: yes, 300 shares.

This week’s lesson has its own guide: due bills and why the record date stops deciding who is paid. Earlier lessons have their own guides: odd-lot priority (issue #1), the Canadian paid-up-capital test (issue #2), broker cutoffs and record dates (issue #3), the upper limit in a split-off exchange offer (issue #4) and US withholding on a self-tender (issue #5).

This week’s situations

Live offers with terms and a deadline, each worked through with the same arithmetic. This week’s filings produced 16 captures: 10 were tenders by funds with no listed share, 3 were results or commentary on offers already finished, 2 were amendments to offers already covered in these pages (Utah Medical’s extension and Medtronic’s final ratio) and 1 was a new offer, for warrants and not for shares. No new block joins the list. Two leave it: Medtronic’s exchange expired on Friday and Nagarro’s acceptance window closed on Tuesday; both are written up further down. The rest carry over, re-priced on Friday’s closes.

Four more offers are open, each short of a usable window at this size. Fnac Darty (Paris) closed unchanged at €34.54 against a €35.00 cash offer, +1.33%; the closing date is set only after European merger clearance, whose first-phase review should end by early November. Eurobio Scientific (Paris) trades at €25.20 against a buy-out offer at €25.30, +0.40%; the indicative timetable has the offer open from 9 to 20 November and the compulsory acquisition from 24 November, all subject to the regulator. Kip McGrath (Sydney) was extended from 14 to 19 October and now closes Mon 19 Oct at 04:00 New York (19:00 Melbourne). The shares closed at A$0.665. The bidder’s terms say the A$0.73 offer “may be reduced from A$0.73 to A$0.67 per share” by the A$0.06 of dividends that went ex on 1 October, and a price just under A$0.67 says the market expects the lower figure: +0.75% against it. A broker minimum of about A$6 is 9% of a 99-share ticket. Reef Casino Trust (Sydney) has an unconditional A$4.67 cash offer that opened on Thu 8 October and closes Mon 9 November at 03:00 New York (19:00 Sydney); at A$4.63 that is +0.86%, and the same A$6 minimum is 1.3% of a 99-unit ticket, more than the whole gross. The author holds none of these.

Gross = (offer − price) ÷ price, on the part of the position the offer takes up. Annualised = gross ÷ days to expected cash × 365, for that trade only — not a yearly or portfolio return.

Broker execution

An offer that expired without the broker ever posting a cutoff

This is the running record of what a broker actually does, as opposed to what the offer document says. The measured gaps between broker cutoff and offer expiry stood at three: Arbutus, four hours early. Oma Savings Bank, about two days early. Delivery Hero, more than two days early. This week adds a fourth, on the same Finnish offer: for the subsequent offer period that ends on 22 October, the broker’s notice sets its own deadline on 20 October. Two days again.

Medtronic is the opposite case. The exchange offer opened on 14 September and expired at midnight New York at the end of Friday 9 October. The broker’s cutoff was asked for on 24 September and was never posted or answered while the offer ran. The only time on paper was the depository’s book-entry channel, expected to stay open until 17:00 New York on the last day. A cutoff that is never published cannot be planned around; the author’s planned 99-share purchase lapsed and no Medtronic was held. For ACV Auctions, twice extended, the broker cutoff is also still unpublished.

Both tenders from earlier issues have now paid. Arbutus expired on 29 September and its release gave payment as “on or about October 5, 2026”; Oma Savings Bank closed on 25 September with payment “on or about 7 October 2026”. Both tender lines have left the account and the cash is in. On the companies’ dates that is six and twelve days after expiry. The next entry in this record is the due bill: what the account shows for Apollo Commercial between 20 and 29 October, the day the $4.10 posts, and whether anything is held back from it.

The dates that matter · New York time

Killed, and what to look for next time

Finished this week: the Medtronic exchange, measured

Issue #4 taught the upper limit in Medtronic’s exchange of its own shares for MiniMed shares: the advertised $107.53 of MiniMed for every $100 of Medtronic was a maximum, capped at 4.5939 MiniMed shares per Medtronic share. The ratio was fixed on Wednesday and the limit is in effect. The information agent’s table gives the three daily volume-weighted prices behind it:

So the discount that was advertised at 7.0% of the MiniMed price arrived as a 3.7% premium over the Medtronic given up, close to the +3.55% worked out in issue #4 on the closes of 25 September. At Medtronic’s average price, MiniMed would have had to average above $20.36 for the limit to switch off, and it averaged $19.63. At Friday’s closes, Medtronic $88.48 and MiniMed $19.71, a holder who tendered 99 shares as an odd lot and had all of them accepted exchanged $8,759.52 of Medtronic for 454.80 MiniMed shares on the arithmetic, worth $8,964.03, a difference of $204.51, or +2.33%. That is a market value on one day, not a locked result: the MiniMed shares have to be received and sold, and three days of one subsidiary’s price decided most of it.

What is not known yet is proration. Medtronic offered up to 225,361,295 MiniMed shares, enough for about 49.06 million Medtronic shares at the final ratio, and the number tendered had not been published when this issue was written. Under the prospectus, holders of fewer than 100 shares who tendered all of them are not prorated; everyone else is cut back pro rata if more came in than the offer can take. The proration factor closes this case in the next issue. Author holds: no.

Killed, and why

Alternative Income REIT (London). A cash offer by Glenstone REIT, unconditional since 9 September, at 71.4p less a 1.4p dividend that only earlier holders keep, so 70.0p to a buyer today. Glenstone held or had acceptances for 81.26% at 5 October, the offer stays open “until further notice” with 14 days’ notice of closing, and payment comes within 14 days of acceptance. The last price is 68.5p, which would be +2.19%. It is killed on one fact: the broker’s daily bars show no trade in any of the five sessions from 5 to 9 October. A last price nobody has dealt at for a week is not a price at which 99 shares can be bought, and at that size a £3 minimum plus 0.5% stamp duty takes more than the spread in any case. Next time: read the volume of the completed sessions before the spread. Author holds: no.

Presidio Property Trust. The filings feed showed this one only at its results, as it did GDEV, written up in the last issue. Presidio offered 5.5 common shares for each of its Series D preferred shares; the offer expired on 2 October with 149,773 preferred shares tendered, about 15.4% of those outstanding, all accepted. On the closes of 2 October, preferred at $6.25 and common at $1.18, the exchange was worth $6.49, +3.84%. By Monday the common was $1.13 and the same 5.5 shares were worth $6.215, less than the preferred given up, before the new shares had even settled. Next time: an offer paid in shares has no fixed spread; price it on the day the new shares can be sold, not on the day it expires. Author holds: no.

Jasper Therapeutics. A new offer, caught on its filing day: $0.324 in cash for each of 12,345,707 warrants, any and all, expiring one minute after 23:59 New York on Friday 6 November. It is an offer for the warrants; the common shares are not sought. The document gives the warrants a Nasdaq symbol, JSPRW, and a search for it at the author’s broker on Sunday returned no contract, so it could not be priced or bought there. It is the same check that removed the two Franklin funds last week: match the class in the offer to the class on the screen. Author holds: no.

Virtus Dividend, Interest & Premium Strategy Fund. The final count on a pro-rata tender with no odd-lot priority: 28,811,699 shares tendered, 23,241,811 accepted, so about 80.67% of each tender was bought, at $15.9192, which was 99% of net asset value at the close of 5 October. A holder of 99 shares had about 80 bought and 19 handed back, and holders outside the United States face the withholding described in issue #5. Author holds: no.

Utah Medical moved its expiry from 7 October to 17:00 New York on Tuesday 27 October. The release gives the reason in these words, “In order to allow all stockholders sufficient time to make their decisions”, and notes that third-quarter results come first, on Thursday 22 October. The amendment moves the date and restates nothing else, so the Offer to Purchase stands as it was: $75.00 for 650,000 shares, 24% withheld from the gross paid to a foreign holder, and an odd-lot priority only for those who held on 21 September. The shares closed at $74.54 on Friday, +0.62% to the offer. An extension adds days to the wait and nothing to the price. Author holds: no.

Nagarro leaves the list because its window has shut. The additional acceptance period ended at midnight in Frankfurt on 6 October with 8,903,259 shares tendered, about 71.94%; with the 22.10% secured under a separate share purchase agreement, Persistent has about 94.04%. Closing is still expected by the end of March 2027. Persistent plans a squeeze-out of the remaining holders at closing and adds that “No final decision has been taken yet.” The shares that were not tendered closed at €77.78 on Friday, with no offer open to them. Author holds: no.

Also checked. Oma Savings Bank’s subsequent offer period pays the same €17.20 and the shares closed at €17.20 on Friday: nothing between price and offer. WildBrain closed at C$1.30, the floor of its C$1.30–1.45 auction, and still cannot be priced, because the circular with the paid-up-capital figure could not be retrieved for a second week. And one capture was a market note about D2L’s issuer bid, which was completed on 24 July: the date that matters is the event’s, not the article’s. Author holds: none of these.

The book

Every position, and every closed one

Open, at Friday’s closes. Apollo Commercial, 300 shares at an average cost of $6.9150, $6.24 on Friday, held for the $4.10 payment on 29 October. Delivery Hero, 50 at €37.035, €36.60 on Friday, not yet accepted. Perfect Corp, 1,200 at an average cost of $1.8088, $1.92 on Friday, held into the meeting on 18 October. SDCL Efficiency Income Trust (London), 2,150 at an average cost of 35.31p, 33.4p on Friday; a managed wind-down with no offer price and no timetable for returning cash, whose next date is the general meeting on 15 October. And 100 contingent value rights from the Atai transaction, on a placeholder line with no market.

Closed since the last issue, both by tender. Arbutus: 99 shares bought on 1 September at an average cost of $5.0501, taken up whole as an odd lot at the $5.00 clearing price: $495.00 against $499.96, a loss of $4.96. The shares closed at $4.22 on Friday, so the same 99 would fetch $417.78 in the market today. Oma Savings Bank: 300 shares bought on 4 September at an average cost of €17.07, paid at €17.20: €5,160.00 against €5,121.00, a gain of €39.00. Both results are computed from the offer price and the average cost; the broker’s own statement of them is still to come.

Closed earlier, and on the record: Lindsell Train Investment Trust, +£22.67. Realised losses on the record: Air Canada, −C$24.95; Zevia, −US$323.10; and now Arbutus, −US$4.96.

The outcome record, every closed position with fills and realised P&L: https://99shares.org/scoreboard/

This publication discusses the mechanics, deadlines and public filings of corporate actions such as tender offers, exchange offers and liquidations. The author does not hold a licence as a financial adviser in any jurisdiction and is not an appointed representative of one. Nothing here is a recommendation to buy, sell or hold any security, and nothing is tailored to any reader’s circumstances. We do not answer individual investment questions. We accept no payment, sponsorship or other benefit from any issuer named. Any position in a named issuer is disclosed in the issue. The author does not trade a security named in an issue from the time the issue is written until two trading days after it is sent. Figures are taken from the primary source cited. Readers should not rely on this publication in making an investment decision.

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