Investment trusts in £1bn merger

Investment trusts in £1bn merger

Two healthcare focused investment trusts listed on the London Stock Exchange are to merge, creating a fund with a market cap of more than £1bn.

The long established trusts, Primary Healthcare Properties, and Medicx, are to combine, it was confirmed in an announcement to the London Stock Exchange (LSE) this morning (January 24).

Primary Healthcare Properties has a market cap of £868m and a dividend yield of 4.8 per cent.

Medicx is a smaller trust, but the combined entity will own assets with a book value of £2.3bn and a market cap of more than £1bn.

Harry Hyman, founder and chairman of Primary Healthcare Properties, said: "The two businesses are complementary in terms of the properties they own, and from our point of view, if we were to try to buy £800m of properties, which come as part of this merger, it would take a long time."

The chairman of the Medicx is to become deputy chairman of the combined business.

The deal is an all share merger, with investors in Medicx receiving a 14 per cent premium to the value of their shares prior to the deal being announced.   

All of the investment management team at Medicx are transferring to the combined entity.

The combined portfolio will consist of 479 properties, and the intention is to achieve cost savings of £4m in terms of administration.