28th Oct 2024 10:28
(Alliance News) - Asia Dragon Trust PLC on Monday revealed a proposed merger with Invesco Asia Trust PLC to create a collective portfolio with net assets of more than GBP800 million.
The tie-up will create a new vehicle, Invesco Asia Dragon, and follows a strategic review announced by Asia Dragon in May as it sought to improve its share price discount.
Asia Dragon is a FTSE 250-listed British investment firm dedicated to investments in Far East companies.
The proposed combination will see Asia Dragon wound up and specific assets aligned with Invesco Asia's investment policy of identifying undervalued Australasian and Asian companies transferred over.
Asia Dragon shareholders will receive new Invesco Asia shares.
The new vehicle is expected to be eligible for the FTSE 250 index and possess improved secondary market liquidity.
Benefits of the combination cited by Asia Dragon include a discount management policy, increased dividend, an unconstrained investment approach and a partial cash exit.
Invesco Asia Chair Neil Rogan said: "This combination is transformational for the company and both sets of shareholders.
"For Asia Dragon’s shareholders, it gives continuity of mandate with a very strong investment house, proven and experienced managers, a repeatable investment process and a fantastic long-term performance record.
"For our own shareholders, apart from the lower fees and greater liquidity, it brings the scale to add to our existing buy ratings that will spur future growth."
Shareholder meetings regarding the combination are expected to take place in early February next year, with the transaction expected to complete shortly thereafter.
Shares in Asia Dragon are up 3.2% at 437.49 pence on Monday morning in London, while Invesco Asia Trust shares rose 0.5% to 333.51p.
By Christopher Ward, Alliance News reporter
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