Troy Income & Growth opts to merge with STS Global Income & Growth
The merger is subject to shareholder approval.
The merger, if approved by each company's shareholders, will see the voluntary liquidation of Troy Income & Growth Trust (TIGT) and the rollover of its assets into STS in exchange for the issue of new shares of STS to holders of TIGT shares.
TIGT shareholders will be offered the option of up to 100% cash exit as an alternative.
Following the deal, the enlarged STS will continue to be managed on the same basis as currently by Troy Asset Management, with James Harries continuing as the lead portfolio manager, supported by Tomasz Boniek and the wider Troy investment team.
Under the proposals, the enlarged STS trust will benefit from an increase in scale, allowing it to spread its fixed costs over a larger cost base, while also improving expected liquidity and shareholder diversification.
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Investors will also see a reduction in management fees to 0.55% of shareholders' funds up to £250m and 0.50% above £250m, where it is currently 0.65% of shareholders' funds.
Explaining the merger, TIGT said in a statement to the stock exchange that TIGT shareholders receiving new STS shares «will have exposure to a larger investment trust which is expected to be more liquid».
It added: «STS has a global approach to achieving its investment objective, providing enhanced opportunities to invest in the world's highest quality companies and to diversify sources of income. However, STS has a similar view to TIGT that the UK is currently an undervalued market.»
STS currently has 32% of its gross portfolio invested in UK companies, and STS and TIGT currently have 15 stocks in common representing 49% of TIGT's current gross portfolio.
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