Insight Select Income Fund Approves Merger with KKR Income Opportunities Fund

Insight Select Income Fund shareholders have approved a reorganization with KKR Income Opportunities Fund. The transaction is expected to close on February 7, 2025, with shareholders receiving consideration in the form of KKR common stock and cash, subject to election. Shares will cease trading on January 31, 2025, with distributions expected on February 12, 2025. The acquired fund will be dissolved and terminated following the reorganization.

Insight Select Income Fund (INSI) shareholders have approved a reorganization with KKR Income Opportunities Fund (KIO), marking a significant strategic move in the closed-end fund space [1]. The transaction, expected to close on February 7, 2025, will create a larger, more liquid investment vehicle, potentially benefiting shareholders through improved economies of scale and enhanced market presence.

Under the agreement, INSI shareholders will receive KIO common stock and can elect to receive a portion in cash, with elections due by January 31, 2025 [1]. Shareholders who don't make an election will automatically receive stock consideration. INSI shares will cease trading on NYSE at 4:00 p.m. on the election deadline date, and distributions of stock and cash are expected to be made on February 12, 2025, or shortly after the reorganization closes. Following the reorganization, INSI will be dissolved and terminated in accordance with organizational documents and the 1940 Act.

This merger represents an opportunity for INSI shareholders to become part of a bigger, potentially more efficient operation. The choice between stock and cash consideration is similar to deciding whether to stay invested in the merged entity or take one's money and invest elsewhere [1]. The default stock consideration option suggests KIO wants to retain assets under management, which could be positive for long-term value creation.

The transaction structure offers flexibility through both stock and cash consideration options, with KIO managing the cash outflow carefully through a proration mechanism [1]. The February 7, 2025, closing timeline is relatively quick, indicating strong institutional support and well-aligned interests. Trading cessation on January 31, 2025, gives a clear arbitrage window for sophisticated investors [1].

The regulatory framework of the reorganization demonstrates careful compliance with the Investment Company Act of 1940, with particular attention to shareholder rights and disclosure requirements [1]. Critical legal aspects include the clear specification of the January 31, 2025, election deadline and the structured election process for consideration type, which balances shareholder flexibility with operational efficiency.

References:
[1] StockTitan. (2023, January 17). Insight Select Income Fund Announces Results of Special Meeting of Shareholders to Approve Merger with KKR Income Opportunities Fund. Retrieved January 20, 2023, from https://www.stocktitan.net/news/INSI/insight-select-income-fund-announces-results-of-special-meeting-of-ba54x9adi7xh.html