Special Opportunities Fund to offer $34.05 million of 3% convertibles

By Toni Weeks

San Diego, June 8 - Special Opportunities Fund, Inc. plans to issue up to $34.05 million of 3% series A convertible preferred stock through a rights offering, according to a 497 filing with the Securities and Exchange Commission.

Shareholders will receive one transferable right for every 10 shares held. Each right will entitle the holder to purchase one convertible at par of $50.00. The company will issue up to 680,987 convertibles.

The conversion ratio is three shares of common stock per convertible.

The company will be able to force conversion if the net asset value of its common stock reaches $20.00 per share. Its shares closed at $15.40 (NYSE: SPE) on Friday.

All of the convertibles will be redeemed after five years.

The rights offering expires July 9.

Shareholders who elect to purchase the maximum amount of convertibles that they are entitled to will also be entitled to subscribe, subject to allotment, to purchase additional convertibles, if any, that are not purchased by the company's other shareholders.

Special Opportunities said it intends to apply to list the convertibles on the New York Stock Exchange under the symbol "SPE Pr." The rights have been admitted for trading through the Nasdaq Capital Market (Nasdaq: SPE).

The proceeds of the offering will be invested according to the fund's investment objectives.

The issuer is a closed-end, diversified management investment company based in Milwaukee. Its investment objective is total return through capital appreciation and current income. Its investment adviser is Brooklyn Capital Management LLC.

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