Morgan Stanley Eastern Europe to tighten trading discount via tenders

By Susanna Moon

Chicago, March 23 - Morgan Stanley Eastern Europe Fund, Inc. said its board of directors approved a policy that tries to tighten the fund's trading discount with the use of tender offers.

The policy requires the fund to make up to four consecutive, semiannual tender offers, each to purchase up to 5% of the fund's outstanding shares for cash at a price equal to 98% of its net asset value per share as of the close of trading the day after the tender offer expires, if the fund's shares trade at an average discount of at least 10% over a 12-week period.

The policy is intended to be responsive to the concerns of the fund's shareholders, according to a company press release.

The first 12-week measurement period will begin April 9.

The fund has a share repurchase program to enhance stockholder value and reduce the discount at which the fund's shares trade from their net asset value, the release noted.

The fund said its board also will periodically monitor whether any additional action is needed for the fund's trading discount.

Wider scope on horizon

The board also approved changes to the fund's investment strategy and concentration investment restriction that will be submitted for stockholder approval at the fund's next annual stockholder meeting to be held in June.

If approved, the fund's investment focus will include equity securities of issuers in Central, Eastern and Southern Europe, the Middle East and Africa; the fund's name will be changed to the Morgan Stanley Emerging Europe, Middle East and Africa Fund; and the fund will not concentrate its investments in any industry or group of industries.

More information about the proposed changes to the fund's investment strategy and concentration investment restriction will be included in a proxy statement to be mailed to stockholders in the second quarter.

Morgan Stanley is a financial services firm based in New York.

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