This morning the share price of Alliance Trust, a Scottish investment firm, rose by a huge 18.5 pence, following the news of merger proposal from RIT Capital. RIT Capital have suggested that the two companies combine their funds to create combined assets of over £2 billion. Alliance Trust has recently been troubled by shareholder unrest.
RIT Capital, which is chaired by financer Lord Jacob Rothschild, has net assets of £2.4 billion, slightly lower than Alliance Trust at £2.65 billion. Dundee-based Alliance Trust has been “under siege” by activist shareholders following a change of strategy.
Alliance Trust board has been entirely replaced, and is now chaired by Lord Robert Smith, the former Commonwealth Games chief and Holyrood reform commissioner.
It is likely he will publish a review of Alliance Trust this summer, and it is expected that the RIT Capital approach will be added to the options.
Alliance Trust have expressed that RIT Capital haven’t provided any detailed terms regarding the proposal but following the confirmation of the merger bid, RIT Capital now have 28 days to make a formal offer or state it has no intention to bid.