Alliance Trust shares rise on merger approach
Shares in Alliance Trust rose on Tuesday after a rival with links to the Rothschild banking dynasty confirmed it was in talks to potentially take over the Scottish investment firm.
RIT Capital Partners said discussions over a merger were at a "preliminary stage".
RIT, which is chaired by financier Jacob Rothschild, has expressed interest in combining both funds.
A merger would take their managed assets to more than £5bn.
In a stock market announcement, RIT said: "The possibility of combining the two companies for the benefit of both sets of shareholders is at a very preliminary stage of consideration.
"Further analysis and discussion will determine whether such an outcome is indeed in the best interests of shareholders and can be achieved.
"There is no certainty that an offer by RIT for the share capital of Alliance Trust will be made."
By the end of trading on Tuesday, Alliance shares were up by nearly 2.5%, at 521p. RIT's share price was down by 2.41%.
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.
RIT has until 27 June either to announce a firm intention to make an offer for Alliance Trust 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, which manages about £2.4bn, was floated on the London Stock Exchange in 1988, growing out of the fortune amassed by the Rothschild banking dynasty.