Alliance Trust and Witan in UK’s largest ever investment trust merger

The boards of Alliance Trust and Witan Investment Trust have entered into heads of terms for a combination of the two companies to create Alliance Witan.

This follows a strategic review by the board of Witan of its investment management arrangements, triggered by the planned retirement of chief executive Andrew Bell.

The combination will build upon the multi-manager investment model already employed by Alliance Trust, which utilises the resources of Willis Towers Watson to create an actively-managed global equity portfolio.

Alliance Witan will apply that methodology within an even more liquid and cost efficient “one stop shop” investment vehicle for global equities.

With net assets of around £5bn, economies of scale, eligibility for FTSE 100 inclusion, established brand recognition, Alliance Witan will aim to be the UK’s leading equity investment proposition.

The merger will be undertaken through a scheme of reconstruction by Witan under s110 of the Insolvency Act 1986, which will see Witan roll into Alliance Trust, in exchange for the issue of new Alliance Witan shares to the continuing Witan shareholders.

Dean Buckley, chair of Alliance Trust, commented: “The formation of Alliance Witan brings together the two leading open-architecture multi-manager investment company propositions in the UK to form a FTSE 100 equity investment vehicle with the quality, cost efficiency and profile to play a leading role in the UK investment market.

“Shareholders will benefit from access to the proven investment process implemented by our investment manager, Willis Towers Watson, and access to the world’s leading stock pickers.

“This is also a significant moment for our industry in broader terms – Alliance Witan represents a key milestone in the history of the investment trust structure which has demonstrated its capabilities very effectively over many decades.”

“Combining our two historic companies, established in 1888 and 1909 respectively, recognises the attractive opportunity to deploy the investment strategy, which has been proven to be robust through the investment cycle, at significantly greater scale.”

Andrew Ross, chair of Witan, said: “Since Andrew Bell announced his intention to retire, we have been through an extensive process to identify the best candidate to take on the management of our shareholders’ assets.

“The board assessed a number of very strong proposals, including single manager candidates with impressive track records, however, the board was unanimous in recommending the combination with Alliance Trust, which allows the continuation of our multi-manager approach at lower fees and in a larger, more liquid vehicle.

“I am delighted to announce this transaction, the largest ever investment trust combination, in Witan’s 100th year as a quoted company on the London Stock Exchange.

“The deal will result in one of the leading investment companies listed in London and will stand our shareholders in good stead for many years to come.“

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