21st Jun 2018 10:01
LONDON (Alliance News) - Dunedin Smaller Cos Investment Trust PLC and Standard Life UK Smaller Cos Trust PLC on Thursday announced they have agreed "in principle" a merger between the two.
The move comes after Dunedin carried out a strategic review, saying the company's size and market liquidity made it hard to bring in new investors.
Further, the merger between manager Aberdeen Asset Management PLC and Standard Life PLC meant it was managed alongside a company with "very similar" aims. Dunedin Smaller Cos is managed by Aberdeen Standard Investments.
The combined firm will have assets of over GBP550 million, and Dunedin said this will create a much larger investment trust with a stronger rating and better market liquidity.
Dunedin Smaller Cos will be voluntarily liquidated and its assets merged into Standard Life UK Smaller, with new shares in the latter going to Dunedin shareholders.
Dunedin Smaller Cos Chairman James Barnes commented: "Dunedin Smaller Cos Trust's size and the secondary market liquidity in its shares makes it challenging to attract new investors. The proposed merger with Standard Life UK Smaller Cos Trust will resolve these issues, creating a merged trust with assets of over GBP550 million and substantially greater secondary market liquidity.
"As Standard Life UK Smaller Cos Trust has consistently had a substantially stronger rating than the company, the board believes that the merger will result in the company's shareholders benefiting from a significant increase in the market value of their investment."
Standard Life UK Smaller Chairman Allister Langlands said: "We are delighted to announce our proposed merger with Dunedin and we believe that this reflects the excellent performance record of Harry Nimoy and his team.
"The merger with Dunedin will benefit the company's shareholders, through increased scale, a reduction in the ongoing charges ratio and increased liquidity. This is the second merger that the company has undertaken in the last 10 years and demonstrates the board's intention to grow the company by a combination of performance and carefully considered corporate activity."
Dunedin Smaller Cos shares were up 8.3% at 309.14 pence each Thursday, with Standard Life UK Smaller trading 0.6% higher at 514.96p.
Related Shares:
SLS.LDunedin Smaller Cos. Investment Trust PLC