Baillie Gifford’s £2.5 billion Monks Investment Trust plc announced it has agreed a proposed combination of the company with the assets of the much smaller Independent Investment Trust plc (IIT).
IIT shares rose about 13%.
Monks said the combination, if approved by shareholders, “will be implemented through a scheme of reconstruction … resulting in the voluntary liquidation of IIT and the rollover of its assets into the company in exchange for the issue of new Monks shares to IIT shareholders, with IIT shareholders offered the option of a full or partial cash exit.”
IIT said that Max Ward, its managing director and full-time portfolio manager, recently informed the board that he wished to retire.
“Given the impact that Max’s retirement would have on the company, the board carefully considered the various options available and decided that a combination with Monks offered the greatest benefit to IIT shareholders,” said IIT.
“The Global Alpha team within Baillie Gifford, which took over the management of Monks in 2015, has a strong long term record, and the wide diversification of the portfolio, beyond the resources of IIT, is a feature which the board of IIT considers attractive against an uncertain geopolitical background which may prove persistent.”
Monks said: “The directors of IIT, who own circa 24.3% of IIT’s issued share capital in aggregate, all intend to elect for the Rollover Option to the full extent of their holdings; and they will also recommend the resolutions which will be put to IIT’s shareholders proposing the implementation of the scheme …”
On June 21, Monks said its biggest holdings at April 30 included The Schiehallion Fund, healthcare insurer Anthem, Indian energy conglomerate Reliance Industries, Microsoft, cement and aggregates manufacturer Martin Marietta Materials, Google parent Alphabet, credit rating agency Moody’s, media and ecommerce company Prosus, miner BHP, and funerals and cemeteries company Service Corporation International.