Cadence Opportunities Fund Launches Discounted Share Purchase Plan Amid Strong Returns
Cadence Opportunities Fund (ASX:CDO) is offering eligible shareholders a chance to buy up to $30,000 of shares at a 3.5% discount to market price, following a 30.3% portfolio gain for FY26 and a 41% total shareholder return.
- SPP priced at $2.21 per share, 3.5% below market
- FY26 portfolio return of 30.3%, share price up 41% including dividends
- Upcoming fully franked final and special dividends yield 7.7%
- Board aims to boost liquidity and reduce expense ratio
- SPP open 3–17 September for Australian and New Zealand shareholders
Discounted Share Purchase Plan Offers Value at Net Tangible Asset Level
Cadence Opportunities Fund Limited (ASX:CDO) has announced a Share Purchase Plan (SPP) that allows eligible shareholders to buy additional shares at $2.21 each, pegged to the fund’s pre-tax Net Tangible Assets (NTA) as of 28 August 2026. This price represents a 3.5% discount to the closing market price of $2.29 on the same day, providing an opportunity to acquire shares below the recent trading premium.
Since declaring its final and special dividends alongside its full-year results, CDO shares have traded at a premium ranging from 3% to 18%, making the SPP an attractive entry point for investors who want exposure at NTA rather than paying a premium.
Strong Portfolio Performance Supports Shareholder Returns
CDO’s portfolio has delivered a robust 30.3% return for the 2026 financial year, with the share price appreciating 41% including dividends and franking credits. The fund’s portfolio also rose approximately 5.0% in August alone, reflecting continued momentum. Over its 7.5-year history, CDO has generated an impressive average annual return of 22.8%, positioning it among Australia’s top-performing investment companies.
Participants in the SPP will be eligible for the upcoming fully franked final dividend of 7.5 cents per share and a special dividend of 2.0 cents per share. Together, these dividends translate to an annualised gross yield of 11%, or 7.7% on a fully franked basis, based on the SPP price. The fund’s profit reserves stand at 73 cents per share, sufficient to cover over four years of dividends, while franking credits amount to 16.2 cents per share, equivalent to 2.5 years of fully franked dividends.
Strategic Aims to Enhance Liquidity and Cost Efficiency
The Board has signalled its commitment to growing CDO’s size to improve share liquidity and reduce the fixed expense ratio. These goals align with shareholder interests by potentially lowering costs per unit and making the shares easier to trade. The Board and management have also indicated their intention to participate in the SPP, reinforcing confidence in the offer.
Eligible shareholders are those recorded on the register at 7.00pm (AEST) on 28 August 2026 with addresses in Australia or New Zealand. The SPP opens on 3 September and closes on 17 September 2026. Cadence plans to release a webcast shortly to provide further details on the offer.
Bottom Line?
The SPP presents a timely chance for shareholders to increase exposure at a discount amid strong fund performance, but the impact on liquidity and share price post-SPP will be worth monitoring closely.
Questions in the middle?
- How will shareholder participation levels influence CDO’s liquidity and expense ratio?
- What is the potential market reaction once the SPP closes on 17 September?
- Will the Board’s commitment to participate encourage broader shareholder uptake?
