LONDON, UK: Troy Income & Growth Trust plc (TIGT), an equity income investment trust, has announced that it has agreed to merge with STS Global Income & Growth Trust plc (STS), another investment trust managed by Troy Asset Management Limited (Troy).

The merger, which is subject to shareholder and regulatory approvals, will be implemented through a scheme of reconstruction that will result in the liquidation of TIGT and the transfer of its assets to STS in exchange for new shares of STS. TIGT shareholders will also have the option of receiving up to 100% cash for their shares at a 2% discount to net asset value (NAV).

Bridget Guerin, Chair Troy Income & Growth Trust, commented: “The Board is pleased to have reached an agreement with the board of STS over the proposed combination of the two companies. The combination will create a larger investment trust that is expected to be more liquid and have reduced overall costs, and will continue to follow Troy’s long term, quality focussed, conservative investment management style with a global opportunity set.”

The combined trust will continue to be managed by Troy’s global income team, led by James Harries, who has been managing global equity portfolios since 2002. The trust will aim to provide a growing level of income and steady capital growth over the long term by investing in high-quality companies around the world.

The merger is expected to bring several benefits for TIGT shareholders, including:

• Reduced overall costs, as STS will align its management fees with TIGT’s;
• Increased liquidity and scale, as the enlarged trust will have a larger market capitalisation and trading volume;
• A significant cost contribution by Troy, equivalent to an eighteen-month fee waiver on the assets transferred from TIGT to STS, which will reduce the impact of the merger costs on TIGT shareholders;
• Value preservation, as TIGT shareholders electing for the cash option will receive 98% of their NAV per share, and those receiving new STS shares will receive 99.7% of their NAV per share (based on current assumptions).

The merger is expected to be completed in the first quarter of 2024, subject to the approval of TIGT and STS shareholders, and the satisfaction of regulatory and tax conditions. The boards of both trusts have unanimously recommended the merger to their respective shareholders.

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