Rothschild merger approach to Alliance Trust

Robert Smith

Dundee-based investment trust firm Alliance Trust has received an informal merger approach from the investment trust of British financier Jacob Rothschild to create a quoted company with a stock market value of more than £5 billion.

RIT Capital Partners, the investment trust chaired by Rothschild which has a stock market value of £2.5 billion, made an informal approach to Alliance Trust in recent weeks.

Alliance Trust has a stock market value of about £2.6 billion and is chaired by veteran Scottish financier Robert Smith.

“The board of Alliance Trust will incorporate any formal merger proposal received from RIT into its strategic review, alongside the other options being considered,” Alliance Trust said.

“Shareholders are strongly advised to take no action and to await the outcome of the board’s strategic review.”

In March, following a traumatic year for Alliance Trust, the firm said its 2015 group revenue fell to £200.2 million from £273.9 million in 2014 and pre-tax profit plunged to £145 million from £228.5 million in 2014.

Alliance Trust has long been under pressure from US activist shareholder Elliott Advisors to restructure.

Previous chair Karin Forseke departed on January 1, 2016, and Katherine Garrett-Cox, chief executive of subsidiary Alliance Trust Investments (ATI), stood down as chief executive of ATI on March 11 this year.

Further, Susan Noble left the Alliance Trust plc board in February to become chairman of the Alliance Trust Investments subsidiary.

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.