Holders of income shares in Prolific Income, managed by Aberdeen Asset Management, will receive a 27...
Holders of income shares in Prolific Income, managed by Aberdeen Asset Management, will receive a 27% capital uplift if they decide to roll over their investments into Second St David's split capital trust, which is also run by Aberdeen.
The directors of Prolific are proposing that the trust should be wound up, with shareholders and warrant holders being given the opportunity to roll over. As well as benefiting from capital uplift, income shareholders will receive the equivalent of nearly five times the income from Prolific. As at close of business on 15 June, Prolific's income shares were yielding 3.6% while those of Second St David's were yielding 15.4%. Investors who do not wish to roll over will receive a cash exit at NAV.
The main reason for rolling over the trust was that it was trading at a wide discount to NAV and, as with other plain vanilla trusts, its warrants were diluting NAV performance. Chris Fishwick, head of specialist funds at Aberdeen, said the share type investors can roll into typically trades at a premium to NAV.
With the rolling over of Prolific Income into St David's and the acquisition of British Income & Growth's management contract from Gartmore, Credit Lyonnais last week questioned which trust, run by Aberdeen, would be next to be converted into a split cap.
Peter Walls, investment trust analyst at Credit Lyonnais said: "All of its conventional trusts trade on attractive discounts and ought to benefit from an instant uplift in share price were they to convert into or be subsumed into a split level trust. Aberdeen appears to be moving inexorably towards becoming a pure splits house."
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till