F&C Commercial Property Trust Share News (FCPT)

(Adds response from F&C Asset Management, updates throughout) By Jason Douglas Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Fund manager F&C Asset Management PLC (FCAM.LN) said Wednesday it is seeking to stop a GBP1.6 billion merger of two U.K. commercial property trusts. F&C Asset Management manages the portfolio of F&C Commercial Property Trust Ltd. (FCPT.LN), which has agreed to merge with UK Commercial Property Trust Ltd. (UKCM.LN). The two trusts said Wednesday they agreed to merge in a bid to save on fees, attract more investors and get involved in bigger property deals. The enlarged trust would become the U.K.'s sixth largest listed property company, with a property portfolio of GBP1.6 billion and market value of about GBP1.6 billion, the two trusts said. The proposed merger has been agreed by the two trusts' boards and has the backing of insurers Phoenix Group Holdings (PGH.AE) and Friends Provident, a unit of Resolution Ltd. (RSL.LN). Together, they own just over 50% of the F&C trust's shares. However, the deal still requires the approval of minority shareholders in both vehicles because Ignis Asset Management, manager and shareholder of UK Commercial Property Trust, is owned by Phoenix. F&C said it is trying to hammer out an alternative plan that would "benefit all shareholders." It didn't provide specific details, but said it is seeking to put proposals to the F&C Commercial Property Trust board that would include reducing costs and keeping the services of Richard Kirby, manager of the trust's portfolio. Under the terms of the merger, Ignis would manage the enlarged trust's portfolio. F&C said it has already received notice of the termination of its contract from the F&C trust, a contract that brought in roughly GBP3.7 million in management and performance fees to the fund manager in 2009. Shareholders in both trusts will vote on the proposed merger in August. Under the terms of the merger deal, shareholders in the F&C trust could choose to receive shares in UK Commercial Property Trust or 91 pence in cash for each share held. F&C Commercial Property Trust shareholders choosing the share option will receive UK Commercial Property Trust shares with a net asset value equivalent to the net asset value of their F&C shares. The trusts' advisers on the deal were Winterflood Investment Trusts, Dickson Minto and Execution Noble. At 1102 GMT, shares in F&C Asset Management were up 0.75 pence, or 1.4%, at 53.05 pence. Shares in F&C Commercial Property Trust were up 1.5 pence or 1.6% at 93 pence, while shares in UK Commercial Property Trust were up 0.2 pence or 0.3% at 77.05 pence. -By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; jason.douglas@dowjones.com (END) Dow Jones Newswires June 09, 2010 07:38 ET (11:38 GMT)