RIT Capital has said a merger with Alliance Trust is “not in the best interests of shareholders” and will not be making a formal offer as a result.
News of the potential £5bn merger was revealed last week, with Alliance Trust confirming it had received an informal approach from RIT Capital, an investment trust chaired by Lord Rothschild.
The merger would have created the largest investment trust in the UK, with Alliance Trust valued at £2.6bn and RIT at £2.4bn.
At the time, RIT said that the talks were at a “very preliminary stage of consideration”, adding that there was “no certainty” an offer for Alliance Trust would be made.
In a statement issued today, RIT said: “Following careful analysis and constructive discussions with representatives of Alliance Trust, RIT has concluded that it would not be in the best interests of its shareholders to make an offer for Alliance Trust.”
Alliance Trust confirmed that no offer would be made from RIT, adding that it would continue to overhaul the business.
In a statement the firm said: “The board of Alliance Trust is implementing a series of changes to enhance shareholder value, as set out in its announcement on 1 October 2015. This process is well under way and has already started to make good progress, lowering costs, narrowing the discount and allowing for the creation of a fully independent board of directors.
“Notwithstanding the achievements to date, this process of development continues and includes a strategic review of the group, encompassing a broad range of potential courses of action. In light of this the board will continue to suspend share buybacks until it has concluded on its strategic review.”