RIT Capital walks away from Alliance Trust merger

RIT Capital said it will not be making a formal offer for the Dundee-based trust, which had seen shares rise by over 3 per cent when news of interest from Jacob Rothschild’s investment house broke last week.

Alliance Trust had previously confirmed 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.

Last week 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.

And 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.”

The now-aborted acquisition had heightened fears of job losses at 128-year old Alliance Trust which has been shedding jobs in recent weeks and has been at the centre of criticism from activist shareholders who accuse it of under-performing and over-paying its executives.

Alliance Trust had said the Rothschild offer would be considered as part of a strategic review that has been ongoing since Lord Smith of Kelvin became chairman in January.

Cannacord Genuity and other specialist advisers have been engaged to advise the company on its future direction.