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LONDON - Franklin Global Trust plc (FRGT) announced on Thursday it has agreed to combine with Invesco Global Equity Income Trust plc (IGET) through a scheme of reconstruction, creating an enlarged investment trust with net assets of up to £445 million.
The combination will be implemented through a scheme under the Insolvency Act 1986, allowing FRGT shareholders to elect to receive new shares in IGET and/or cash. Invesco Fund Managers Limited will continue to manage the enlarged entity’s portfolio.
FRGT Chairman Christopher Metcalfe, who will join IGET’s board following the merger, cited IGET’s strong performance record as a key benefit for shareholders. According to the announcement, IGET has outperformed all Global Equity Income peers over three and five years, delivering NAV total returns of 74.5 percent and 140.3 percent respectively.
The deal offers FRGT shareholders potential benefits including improved share rating, with IGET currently trading at a 1.9 percent premium compared to FRGT’s 2.6 percent discount. Shareholders can also expect an enhanced dividend policy of at least 4 percent of the previous year-end NAV, paid quarterly.
FRGT shareholders who do not wish to roll over into IGET will have the opportunity to realize their holdings for cash. The cash option will be offered at a 2 percent discount to FRGT’s formula asset value per share.
The board cited FRGT’s disappointing investment performance and diminishing size as factors behind the decision. The company’s market capitalization has reduced from £300 million to £182 million over the last five years.
Invesco has agreed to contribute to transaction costs equivalent to twelve months’ management fee on the assets being transferred to IGET.
The merger documentation is expected to be sent to shareholders in January 2026, with completion anticipated in February 2026. The announcement was based on a press release statement from Franklin Global Trust.
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