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RIT has no plans to buy Alliance Trust

RIT has no plans to buy Alliance Trust

An investment trust owned largely by Lord Jacob Rothschild has said it has “no intention” of making an offer to buy Alliance Trust.

Last week, Alliance Trust confirmed that RIT Capital Partners, which manages £2.4bn of assets, had made an “informal proposal” to merge the two companies.

It was suggested that the merger approach, which was in the first stage of consideration, could have benefited both sets of shareholders.

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However, a statement from RIT Capital published on the London Stock Exchange on 7 June, read: “Following careful analysis and constructive discussions with representatives of Alliance Trust, RIT has concluded that it would not be in the best interests of its shareholders to make an offer.

“The board of RIT respects the process that Alliance Trust are going through and wishes them well with their strategic review.”

The future of Alliance Trust has been under close scrutiny over the past year after the largest individual shareholder in the £2.7bn company, Elliott Advisors, said it was concerned about its internal management costs and underperformance against its peers.

Elliott Advisors called for a restructure of board members, which led to the departure of Alliance Trust chief executive Katherine Garrett-Cox.

Responding to today’s announcement from RIT Capital Partners, a spokesman for Alliance Trust said the board is implementing a “series of changes to enhance shareholder value”.

“This process is well under way and has already started to make good progress, lowering costs, narrowing the discount and allowing for the creation of a fully independent board of directors.”

In light of this, the trust will continue to suspend share buybacks until it has completed its strategic review.

katherine.denham@ft.com