(Alliance News) - Downing Strategic Micro-Cap Investment Trust PLC on Wednesday said its proposed wind-down was voted down due to a new shareholder casting against it, while declaring a new dividend.
The London-based investment trust said its resolution 1 at the general meeting, regarding a managed wind down, received only about 57% votes in favour, falling short of the required 75%.
In March, Milkwood Capital Ltd, a long-term value-oriented fund manager based in Windsor, England, said it recently bought a near 17% stake in the company through the Milkwood Fund.
Milkwood back then said it believed that the UK equity market was materially undervalued, with this undervaluation even more pronounced in smaller-sized companies, which is where Downing's portfolio is invested. It believes that Downing provides an excellent vehicle to explore this opportunity.
"Other than shares controlled by Milkwood Capital Ltd, a new investor opposed to the managed wind-down of the company, less than 0.28% of the votes cast voted against resolution 1," Downing Strategic noted.
Meanwhile, Downing declared a special dividend of 30 pence per share, with a further special dividend of around 8p per share to be made by the end of June.
Downing Chair Hugh Aldous said: "Given today's result and the fact that our preferred proposal has been blocked by a new shareholder with an agenda of its own, we believe that the correct thing to do is to press ahead with a dividend to shareholders which, while not our preferred route, has the merit of fulfilling the mandate we were given to wind-down the trust and return cash proceeds forthwith."
Downing shares closed 0.9% lower at 57.50 pence each on Wednesday in London.
By Tom Budszus, Alliance News slot editor
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Downing Strate. (DSM)