Scotland business

Alliance Trust receives merger approach

Alliance Trust building
Image caption Alliance Trust employs about 250 people at its Dundee headquarters

Scottish investment firm Alliance Trust has confirmed it has received an informal merger approach from an asset management company largely controlled by the Rothschild family.

RIT Capital has expressed interest in combining both funds to take their managed assets to more than £5bn.

Dundee-based Alliance Trust has been under siege by activist shareholders

They have been pushing the board to boost shareholder value with a change of strategy.

The board has been entirely replaced, and is now chaired by Lord Robert Smith, the former Commonwealth Games chief and Holyrood reform commissioner.

He is to publish a review of Alliance Trust this summer, for which the RIT approach will be added to the options.

However, the confirmation of a merger bid starts the clock on the 28-day period during which RIT must either make a formal offer or state it has no intention to bid.

Alliance, which manages about £2.7bn of assets, said RIT had not provided any detailed terms regarding the proposal.

RIT Capital Partners, which manages about £2.4bn, was floated on the London Stock Exchange in 1988, growing out of the fortune amassed by the famous Rothschild banking dynasty.

There are several members of the family on the board, including chairman Lord Rothschild, and family members own 21% of its stock.