Good news! Dunedin Smaller Companies Trust, takeover by Standard Life Smaller Companies

Dunedin Smaller Companies Investment Trust (DNDL.L Market Cap. 137m, FTSE Small Cap index, 285p and 3.1% of JIC Portfolio)

Conclusion: The Board should be applauded. I expect to see a 10-15% uplift in the share price. I intend to hold on through the process and then once I am in receipt of shares in Standard Life Smaller Companies will decide whether I could do better with the money somewhere else, (another Trust on a big discount perhaps). Happy Holder!

Good news for holders of Dunedin Smaller Companies Investment Trust this morning. The Board is recommending that it merges with Standard Life UK Smaller Companies Trust. It’s good news as it will be effected by way of a scheme of reconstruction of the Company under section 110 of the Insolvency Act 1986 resulting in the voluntary liquidation of the Company and shareholders rolling over their investment in the Company into SLS on the basis of an all-share, nil premium (to NAV) merger”.In other words, shareholders in Dunedin Smaller Companies should receive shares in Standard Life Smaller Companies at around NAV. The shares currently stand at a 16.0% discount.

The Board is recommending the deal following a strategic review that concluded the Trust was too small, had poor liquidity and was likely to continue to trade at a large discount to NAV as it was difficult to attract new shareholders to the company.

Standard Life Smaller Companies has a similar mandate, has performed well and has traded at an average discount to NAV of 17.4% over the last year compared to 3.8% for the Standard Life Trust.

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