AVI Japan Opportunity Trust published two tender-related announcements in October, one on 19 October and another on 29 October. They come as its shares trade below estimated net asset value and at a wider discount than their 12-month average.

What happened

AVI Japan Opportunity Trust PLC (LSE:AJOT) is an Investment trust whose objective references the MSCI Japan Small Cap Index. It is a constituent of the FTSE All-Share index, appearing on Hargreaves Lansdown's list of index members.

The feed lists a "Tender Offer and Notice of General Meeting" on 19 October and a "Tender Offer for a Top 10 Portfolio Holding" on 29 October. The second title indicates that the tender relates to one of the trust's largest investments, rather than to the trust's own shares.

We were able to review the titles, but not the full text, of these announcements. This article therefore does not report the terms, the price, the meeting date or the name of the holding involved. Shareholders should read the original documents for those details.

The same feed shows a transaction in own shares notice and a net asset value statement on 30 October. Other recent items included a September monthly update on 12 October, a Kepler research notice on 15 October and director shareholding notices on 21 September and 7 October.

Why it matters for investors

Tender offers can affect a trust in two separate ways. One that involves the trust's own shares may offer holders a way to sell near asset value, and it usually requires a Shareholder vote. A bid for a company in the portfolio can instead affect net asset value directly, and a large holding has more influence than a small one.

Which of these effects applies to each notice can be determined only from the full announcements. The titles do, however, make clear why this is an active period for the trust's investors, compared with the routine disclosures that dominate many trust news feeds.

The valuation backdrop sharpens the interest. AJ Bell's page on 3 November listed an estimated net asset value of 185.53p and a discount of 6.21%, against a 12-month average of 2.27%. The latest actual net asset value shown was 185.18p, dated 31 October.

That is a wider gap than the trust's recent norm. It may reflect several factors, and we have no evidence linking it specifically to the October notices. The listed discount appears to use the previous close, while the 175.00p last trade implies a gap of about 5.7%, by our calculation.

How the shares have performed

The last trade on the AJ Bell page was at 175.00p on 3 November, up 1.00p, or 0.57%, from the 174.00p previous close. Prices are delayed by at least 15 minutes.

The 12-month range is 154.50p to 194.00p, placing the shares about 9.8% below the high and 13.3% above the low, by our calculation. The page gave a Market Value of £381.59m, a Dividend Yield of 1.19% and an ongoing charge of 1.46%.

The half-year report was published on 17 September, and the Annual Report for the previous financial year on 13 March. We did not review the figures in those reports for this article.

What to watch next

The main item is the outcome of the 19 October proposals, including the general meeting named in that announcement's title. Investors should check the circular for the timetable, and any later results notice should show the level of shareholder support.

The second is the progress of the tender involving the top 10 holding, since completion or failure could change the trust's portfolio and its cash position. The next monthly update, following September's on 12 October, may give further detail. Daily net asset value statements will show whether the discount moves back towards its 12-month average.