Artemis Alpha trust agrees to takeover by Phoenix competitor
The Phoenix-run Aurora Investment Trust has proposed a takeover of the Artemis Alpha Trust, which would see the two trusts merge to combine £353m of assets.
The £123.7m Artemis trust and the £198.6m Aurora trust are around 25 years old. The new trust will be named the Aurora Alpha Trust if the merger is completed.
The deal would see Aurora’s board remain unchanged, along with its investment objective and management by Phoenix.
However, the lead manager of Artemis Alpha has agreed to join Phoenix’s investment management team later this year. Artemis shareholders would receive newly issued shares in Aurora.
The Artemis trust has returned -9.6 per cent over the last three years and currently sits at a 13.5 per cent discount to underlying assets.
The Aurora trust has returned more than 20 per cent over the last three years, and its discount to underlying assets is only 7.8 per cent.
Phoenix also said it would be willing to contribute £ 750,000 to the merger costs, which “is expected to substantially offset the fixed direct transaction costs for Aurora shareholders.”
Aurora also said: “The enlarged Aurora is expected to benefit from a lower ongoing charges ratio as a result of Aurora’s fixed costs being spread over a larger asset base.”
The deal seems likely to go ahead. Around 31.5 per cent of both trusts’ shareholders have already expressed support for the merger.
“The Aurora board is delighted to welcome Artemis Alpha shareholders who will enter into an investment trust with a similar philosophy and portfolio, and the enlarged trust will benefit all shareholders through lower fees and better liquidity,” said Aurora chair Lucy Walker.