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Research: Investment Companies
In June 2024, the boards of Witan Investment Trust (WTAN) and Alliance Trust (ATST) announced plans for a combination of the two companies to create Alliance Witan. Details of this transaction have now been released and suggest that the combination will hold several potential benefits for the shareholders of WTAN, ATST and the new Alliance Witan trust. Alliance Witan will have combined net assets of almost £5bn, offering significant liquidity, economies of scale and eligibility for UK 100 index inclusion. The new trust will aim to deliver a real return over the long term through a combination of capital growth and a rising dividend. It aspires to be the UK’s leading ‘one-stop shop’ for global equity investment, at the core of retail investors’ portfolios. Subject to shareholder approval, the deal is expected to be finalised in early October.
Witan Investment Trust |
Merger with Alliance Trust offers many benefits |
Investment trusts |
23 September 2024 |
Analyst
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In June 2024, the boards of Witan Investment Trust (WTAN) and Alliance Trust (ATST) announced plans for a combination of the two companies to create Alliance Witan. Details of this transaction have now been released and suggest that the combination will hold several potential benefits for the shareholders of WTAN, ATST and the new Alliance Witan trust. Alliance Witan will have combined net assets of almost £5bn, offering significant liquidity, economies of scale and eligibility for UK 100 index inclusion. The new trust will aim to deliver a real return over the long term through a combination of capital growth and a rising dividend. It aspires to be the UK’s leading ‘one-stop shop’ for global equity investment, at the core of retail investors’ portfolios. Subject to shareholder approval, the deal is expected to be finalised in early October.
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NAV total return performance versus benchmark over five years |
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Source: LSEG Data & Analytics, Edison Investment Research |
Background to the proposal
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The forthcoming combination follows a review of WTAN’s investment management arrangements, which was triggered by the retirement announcement of its CEO, Andrew Bell.
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The proposed deal ensures the continuation of WTAN’s active multi-manager approach and a broadly similar investment strategy. ATST invests primarily in global equities across a wide range of industries and sectors.
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WTAN’s board has unanimously recommended the deal to shareholders.
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Subject to shareholder approval at meetings scheduled for 30 September 2024 and early October, the transaction is expected to be finalised on 9 October and the shares of the new, combined trust will begin trading on 10 October 2024.
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The board of this new vehicle will initially comprise 10 members, including four members of WTAN’s board, and will be chaired by ATST’s chairman, Dean Buckley. WTAN’s chair, Andrew Ross, will be deputy chair.
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The number of Alliance Witan board members will be reduced to eight in spring 2025 at the new trust’s first AGM.
Research: Healthcare
Newron Pharmaceuticals’ H124 results reflect a period of positive traction for lead clinical asset evenamide, with stellar clinical data as an add-on treatment in schizophrenia, building a strong foundation for the upcoming, potentially pivotal Phase III programme (study 017). While the Phase III trial will initially focus on treatment-resistant schizophrenia (TRS), we note the likelihood of the trial expanding to cover patients with poorly managed symptoms, as evaluated in the prior Phase II/III 008A study, which we have reflected in our estimates. With discussions focused on securing the most beneficial partnering option, management expects the trial to initiate in H125, with funding in place to achieve this milestone. Our valuation adjusts to CHF245.8m or CHF12.8/share (previously CHF219.1m or CHF12.3/share).