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LONDON - AVI Japan Opportunity (SO:FTCE11B) Trust plc (AJOT) announced on Tuesday that it has agreed to non-binding terms for the acquisition of assets from Fidelity Japan Trust Plc (FJV) through a scheme of reconstruction.
Under the proposed transaction, FJV shareholders can elect to receive either new AJOT shares (the default option) or cash at a 1% discount to formula asset value per share. The cash option will be limited to 50% of FJV shares in issue, excluding treasury shares.
The transaction has received support from FJV’s largest shareholder, City of London Investment Management, which holds approximately 23.2% of FJV’s issued share capital.
Asset Value Investors will continue to manage the enlarged portfolio in accordance with AJOT’s existing investment strategy, which focuses on undervalued Japanese equities and active engagement with management.
Assuming full uptake of the cash option, the enlarged AJOT is expected to have net assets exceeding £370 million. The combined entity aims to benefit from increased scale, improved share rating, and enhanced liquidity.
As part of the agreement, Asset Value Investors has agreed to reduce its management fee from a flat 1% per annum to a tiered structure on assets above £300 million, with rates decreasing to 0.95% for assets between £300-350 million and 0.90% for assets exceeding £350 million.
FJV’s unquoted assets will be transferred to AJOT at the scheme’s effective date, while the majority of remaining assets will be converted to cash before completion. The unquoted assets are expected to comprise less than 5% of AJOT’s enlarged net asset value.
The transaction is subject to shareholder approvals from both companies, regulatory clearances, and other conditions. Documentation is expected to be sent to shareholders with completion targeted by the end of November 2025.
FJV shareholders who receive new AJOT shares will be eligible to participate in AJOT’s 2025 annual realisation opportunity, part of the trust’s discount control mechanisms.
The announcement was made via a press release statement from the companies.
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