Troy Income & Growth Trust PLC and STS Global Income & Growth Trust PLC boards have agreed terms for a proposed combination.
The enlarged investment trust will be managed by Troy Asset Management following STS’s strategy of investing in a high quality global equity portfolio, with a long-term, conservative approach.
James Harries will continue to be the lead manager, supported by Thomaz Boniek and the wider Troy investment team.
TIGT will go into voluntary liquidation and its assets will be rolled into STS in exchange for the issue of new STS shares to TIGT shareholders, who also have the option of up to 100% cash exit at a 2% discount to NAV.
Troy said the merger will bring increased scale and spread fixed costs over a larger cost base, whilst improving expected liquidity.
STS told investors that fees will be reduced to 0.55% of shareholders' funds up to £250 milion and 0.50% above £250 million from the current 0.65% of shareholders' funds.
If the merger is approved by shareholders, the combination is expected to be completed by the end of March 2024.
TIGT assets and cash will be transferred to STS on a formula asset value (FAV) for FAV basis, based on net asset values.
There is significant portfolio overlap, with TIGT owning 15 stocks in common, representing 49% of its gross portfolio.