On Monday afternoon, I received a call from Georgeson Shareholder regarding the recent Tri-Continental (TY) proxy mailing. They are working for Tri-Continental and wanted to be sure that I received my proxy from Tri-Continental with the red cover. The caller also indicated that a competing proxy was also being mailed out shortly, but it would have a gold colored envelope. The caller from Georgeson Shareholder encouraged me to support management in the vote. The final vote will be on May 4, 2006.
This is all pretty exciting. My goal in purchasing Tri-Continental was to take advantage of its large discount to net asset value (NAV). That gap is slowly starting to close. As I wrote last month, Western Investment LLC is trying to exert pressure on Tri-Continental to remedy the discount to NAV. I was really hoping that an activist shareholder would step in and address the discount problem. It looks like Western Investment is really stepping up to this task by getting a list of shareholders and mailing out a competing proxy.
I’m a bit disappointed that Tri-Continental is putting up a fight on this issue. However, I believe that Western Investment’s actions will force Tri-Continental to make changes even if Tri-Continental wins the vote. All this activity is likely creating a catalyst that could unlocking the value of Tri-Continental shares.