Rothschild urges caution on Alliance Trust deal

RIT Capital Partners chairman Jacob Rothschild. Picture: Leon Neal/AFP/Getty Images
RIT Capital Partners chairman Jacob Rothschild. Picture: Leon Neal/AFP/Getty Images
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The Rothschild‑linked company that has made an informal takeover approach to Dundee-based Alliance Trust cautioned yesterday that a merger was only at a very early stage of consideration.

RIT Capital Partners, whose chairman is Jacob Rothschild of the eponymous financial dynasty, issued the statement the day after the venerable Scottish investment trust confirmed it had received the approach but that it had contained no details.

“The possibility of combining the two companies for the benefit of both sets of shareholders is at a very preliminary stage of consideration,” RIT Capital Partners said.

“Further analysis and discussion will determine whether such an outcome is indeed in the best interests of shareholders and can be achieved.”

READ MORE: Alliance Trust receives ‘informal takeover approach’

Despite the caveat, on the stock market Alliance Trust shares added 2.5 per cent to 521p. RIT’s shares fell 2.5 per cent to 1,579p.

Alliance Trust, bedevilled by investor activism and boardroom upheaval over the past 18 months that has seen chief executive Katherine Garrett-Cox and chair Karin Forseke ousted, has urged its shareholders to await the outcome of an ongoing company strategic review.

The 128-year-old investment company said that the review would include any RIT proposals, but may take “some months”.

Broker Hargreaves Lansdown said yesterday that both trusts had widely different objectives and philosophy, and that “the politics of Alliance Trust’s Scottish base” would also help make this “a potentially complex merger”.