Third Point Investors (TPOU ), Dan Loeb’s underperforming London-listed hedge fund, is to offer investors a 25% exit after the shares breached a threshold set three years ago in a tussle with activist shareholders.

The Guernsey investment company, a feeder for Loeb’s Third Point Master Fund in the US, announced a tender offer that will let investors sell a quarter of the company’s shares at a 2% discount to net asset value (NAV).

The sterling TPOS shares, which closed last week at a 21% discount, jumped over 5%, or 92.5p to £178.45 at the news.

The dollar TPOU shares were more subdued, spiking 2.9% to $23.30 from a 19% discount. 

The decision was triggered by the shares trading at an average 20% below asset value in the six months to 31 March, double the 10% level announced by the board in April 2021 when it faced demands for tougher discount controls.

Each shareholder will be entitled to tender 25% of their shares as a ‘basic entitlement’ but will be allowed to sell more if other investors do not tender their quota.

Loeb and his family will participate. They own 23% of the investment company and would risk seeing their stake rise to 30%, a level compelling either a bid or obtaining a ‘whitewash’ agreement from the Takeover Panel waiving the requirement.

‘We expect that without the commitment to tender it would increase the complexity and expense of the tender, and leave the manager with an even more significant stake,’ said analysts at the fund’s broker, Deutsche Numis.

The tender is likely to be welcomed by Asset Value Investors, manager of AVI Global (AGT) investment trust which held a 2.6% weighting at its annual results in November.

In 2021, AVI and fellow activist Staude Capital took credit for a narrowing of Third Point’s discount after pushing the company to move to a premium London listing, start share buybacks and cut management fees.

The spat turned ugly in December of that year when Third Point chair Steve Bates resigned, saying the rebels had threatened his other business interests.

Since then performance has underwhelmed. According to figures from the company, at the end of February the portfolio of equity and credit positions had slipped an average of 0.8% a year in the past three years, compared to annualised returns of 11.9% from the US S&P 50 and 9.2% from the MSCI World index.

Before today, the shares had rallied 15% this year, helped by speculation of a potential bumper payout from R2 Semiconductor should it win a patent infringement case against chip giant Intel that is being funded by Third Point.