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STS urges investors to reject Pigit bid

The board of the 354.6m Securities Trust of Scotland has written to shareholders in inch-high letters urging them not to accept the hostile takeover bid from the 387.4m Perpetual income and growth investment trust.

STS says if shareholders reject the offer from Pigit, they will be given the option of exchanging their shares for cash, shares in the Lowland investment company managed by Henderson or shares in a new trust to be managed by Martin Currie.

Pigit has responded by releasing a document urging shareholders to back its bid. It accuses the STS board of trying to cling to their jobs, keep as much money as possible with Martin Currie and do anything they can to find an alternative to Pigit.

Investment trust analyst Arbuthnot Securities, which is backing Pigit, says the option to take shares in Lowland is a red herring as there is little between the two trusts in performance terms.

It claims the options proposed by STS will inevitably result in a smaller version of the existing trust and accuses the STS board of clutching at straws.

In a statement, Pigit chairman Sir Patrick Sheehy says: “As a result of our actions, shareholders will have the chance to escape from one of the worst-performing investment trusts in its peer group.”

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