F&C loses commercial property trust contract
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F&C has been served notice from the board of the F&C commercial property trust ahead of a proposed merger with Ignis Investment’s UK commercial property trust.
F&C was given a six-month notice period from the board of the trust, who recommends the merger through a scheme of reconstruction.
The scheme would see FCPT shareholders receive new UKCPT shares with the net asset value (NAV) at the same level of their FCPT shares.
Shareholders can also receive 91p in cash per FCPT share. The board says the reduction would see the total expense ration fall to 0.7% per year through a drop in the asset management fee payable to Ignis.
The merger would create the sixth largest UK-listed property trust standing at £1.6 billion. In April, the boards of the UKCPT and the FCPT announced they were considering a merger.
F&C says it is disappointed to have been served notice given the performance of the trust under the F&C Reit’s management, headed by Richard Kirby. It says the trust was top quartile over one, three and five years to March 31, 2010.
Friends Provident and Phoenix Group are the majority shareholders in the trust, however for the merger to go ahead minority shareholders must also approve the deal. A result is expected in early August.
F&C Reit has been looking to develop an alternative proposal, which it says will result in a significant reduction in the total expense ratio in the company.
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