Scottish Investment Trust and JPMorgan’s Global Growth & Income (JGGI) business are planning to merge by Q1 of next year. If the merger goes ahead, a company with net assets of over £1.2bn will be formed.
As part of the deal’s reconstruction scheme, Scottish will voluntarily liquidate, essentially creating an expanded JGGI.
According to the architects of the deal, the merger is “the most compelling outcome” for shareholders. While JGGI’s market price was at a nearly 3 per cent premium to its asset value on this October’s market close, Scottish sat at a 10 per cent discount. Notably, Scottish shareholders will own shares in the enlarged JGGI when the transaction completes. These shares will be calculated via a formula asset value basis, whereby the net asset values of each company and the respective allocations of costs will be taken into account.
Scottish Investment Trust’s chairman, James Will, commented:
“Our two companies were both launched in 1887, and this combination will reflect both of their proud histories within a single vehicle with relevance for the investment market place today.
“JGGI offers a style-agnostic total return approach that has delivered index-beating performance, and distributes an attractive dividend to investors.
“The board would like to place on record its deep gratitude for the dedication and professionalism of the employees of The Scottish Investment Trust, including during the period of the review.”
JGGI’s board chairman will be retiring this October, so the enlarged merged firm will be headed up by his successor Tristan Hillgarth.
Meanwhile, SIT Savings, Scottish’s wholly-owned subsidiary, will not transfer to JPMorgan. Instead, it will be liquidated, while the office that its based in – Scottish Investment Trust’s Edinburgh office – will be sold.
A spokesperson for the investment manager said:
“It is anticipated that members of the defined benefit pension scheme, which has been closed to new members since 2015, will have their benefits under the pension scheme fully secured through a buy-in and buy-out with an insurer. Sufficient capital shall remain with the liquidator to ensure that this can be achieved.”
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