After a very busy month of announcements we were unable to include this note on TIGT's merger proposal in the December newsletter, due out this weekend, so we are publishing it here instead.
Following an earlier announcement that it was considering a combination with another investment trust, Troy Income & Growth Trust (TIGT, 67.4p) has agreed a merger arrangement with STS Global Income & Growth Trust (STS, 214.5p), with the enlarged STS trust to be managed as currently by James Harries and his team at Troy. A full cash exit is also available. This looks like a straightforward combination to allow the trusts to benefit from greater scale, adding around £165m of assets from TIGT to the £215m of STS. Although TIGT is a UK trust and STS is global, the two trusts actually have quite a large overlap, as STS has viewed the UK as an undervalued market and has 32% of its gross portfolio invested in UK companies. STS and TIGT currently have 15 stocks in common representing 49% of TIGT’s current gross portfolio, so the portfolio reorganisation should be relatively painless.
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