RIT Capital Partners, the investment trust chaired by Lord Rothschild, said on Tuesday it will not, after all, make a takeover offer for Dundee-based investment trust specialist Alliance Trust.
“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 the firm.
“The Board of RIT respects the process which Alliance Trust are going through and wishes them well with their strategic review.”
RIT had until June 27 to announce whether it will make a firm offer for Alliance Trust in accordance with the UK’s takeover code.
Alliance Trust had received an informal takeover approach from RIT to create a quoted company with a stock market value of more than £5 billion.
The Dundee firm had said it would consider any formal merger proposal received from RIT alongside the other options being considered as part of its ongoing strategic review.
US activist shareholder Elliott Advisors owns more than 10% of Alliance Trust shares and has long been putting pressure on Alliance to restructure.
Elliott would have a big influence on the outcome of any bid for Alliance Trust, with some analysts speculating Elliott would want cash for its stake in the Dundee firm and not shares.
Alliance Trust has a stock market value of about £2.7 billion and is chaired by veteran Scottish financier Robert Smith.
In a statement on Tuesday after the RIT announcement, Alliance Trust said: “The board of Alliance Trust is implementing a series of changes to enhance shareholder value, as set out in its announcement on 1 October 2015.
“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.
“Notwithstanding the achievements to date, this process of development continues and includes a strategic review of the group, encompassing a broad range of potential courses of action.
“In light of this the board will continue to suspend share buybacks until it has concluded on its strategic review.”