Scottish Widows Unit Funds has abandoned its plans to regain the £400m UK balanced property trust from former property head Tom Laidlaw’s start up boutique Cordatus Capital Partners.
Swuf postponed this week’s EGM to discuss the future of the trust, which would have seen shareholders vote on proposed plans to break up the current board, with Swuf looking to install three directors of its own.
The trust has entered a conditional contract with Cordatus, backed by GE Capital, in a deal that values the trust at £417.5m, representing a 5.7 per cent premium to its net asset value at June 30.
The trust was trading at a 16 per cent discount to NAV prior to the announcement and Swuf has been quick to claim credit for the uplift in its value.
Chairman Jim McConville says: “We are delighted with the headline terms of the UK balanced property trust announcement. As a direct result of our actions, shareholders in the trust will receive a 24 per cent uplift in the value of their investment.”
A second EGM will be held on August 17, when there will be a vote on the board’s current plans.
As part of the deal, Cordatus is to receive a £2.3m performance-based incentive fee. The boutique was hit hard after having to pay Scottish Widows £1.35m in compensation in April for taking the management contract of the trust.
Advisers Savills also got £1.8m for the deal as a “succ-ess fee”, a move that the trust claimed was in line with the industry average.
The trust has been the subject of a long-running and bitter wrangle that even saw Laidlaw and former Widows deputy Mike Channing being subjected to a police raid on their homes to seize personal documents on the eve of the pair taking on the trust in April.