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(Alliance News) - JPMorgan Global Growth & Income PLC and JPMorgan Multi-Asset Growth & Income PLC on Wednesday announced plans to merge, with the latter's chair saying that "size does matter".
The investment companies said they agreed heads of terms under a proposed rollover of assets from JPMorgan Multi-Asset to JPMorgan Global Growth.
JPMorgan Multi-Asset said the aggregate net assets to be transferred under the scheme is estimated at about GBP71 million. JPMorgan Multi-Asset holders will receive shares in JPMorgan Global Growth, with the number calculated on a formula asset value basis.
JPMorgan Global Growth shares were 0.6% higher at 506.99 pence each on Wednesday morning in London, giving the FTSE 250-listed investment trust a market capitalisation of GBP2.15 billion.
JPMorgan Multi-Asset shares were 0.6% lower at 95.14 pence each for a market cap of GBP68.4 million.
The costs of the transaction will not be borne by shareholders of JPMorgan Multi-Asset, the company said, as JPMorgan has agreed a contribution to all the direct corporate costs that will be incurred from the merger.
The proposals are subject to shareholder approval from both companies, which expect the merger to complete by the end of March.
JPMorgan Multi-Asset Chair Sarah MacAulay said: "Your board has been conscious for some time that MATE's relatively small size reduced its appeal to investors, while prospects for the company's growth have been limited by difficult market conditions. Unfortunately, size does matter due to the implications for costs and for the liquidity of MATE's shares. The board believes that the proposed combination with JPMorgan Global Growth & Income offers shareholders exposure to a large, liquid company with significantly lower costs and a well-established dividend policy."
JPMorgan Global Growth Chair Tristan Hillgarth added: "The proposals are expected to provide additional scale to the company building on recent transactions and ongoing issuance, all of which contribute to cost savings for shareholders as JGGI benefits from its tiered management fee structure and fixed costs being spread over a larger asset base. This transaction further demonstrates the interest in the company's investment proposition and the board believes JGGI is well placed to continue to deliver for shareholders over the long-term."
By Tom Budszus, Alliance News slot editor
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