Jacob Rothschild says No to merger with Alliance Trust

After confirming an approach last week, RIT, Jacob Rothschild’s investment group which manages £2.4bn of assets, has released a statement stating they won’t be making an offer for Alliance Trust, the challenged fund manager.
The decision is bad news for Alliance Trusts major shareholder Elliot Advisors, who have made no secret of their dissatisfaction of Alliance Trust’s performance and leadership team costs, which led to the departure of chief exec Katherine Garrett-Cox and sparked a wider review. Analysts said Alliance Trust now urgently needs to find a buyer, or an alternative solution which would allow Elliot to sell its 16% stake.
Commenting on why the £5bn deal didn’t work out with RIT said in its statement:
“Following careful analysis and constructive discussions with representatives of Alliance Trust, RIT has concluded that it would not be in the best interests of its shareholders to make an offer for Alliance Trust and accordingly announces that it does not intend to make an offer to acquire Alliance Trust,” said RIT.
“The board of RIT respects the process which Alliance Trust are going through and wishes them well with their strategic review.”
In response, a spokesperson for Alliance Trust said the board is implementing a “series of changes to enhance shareholder value”.
“This process is well under way and has already started to make good progress, lowering costs, narrowing the discount and allowing for the creation of a fully independent board of directors.”
Alliance Trust must now revisit how best to move forward and structure a deal which is in all parties’ best interests.