The UK Balanced Property Trust hit back this morning in its battle with Scottish Widows Investment Partnership (SWIP), the former manager of the trust that is trying to regain control
The £300m listed trust said Scottish Widows' offer to shareholders giving them the opportunity to roll over their investment into a new investment trust, managed by SWIP, ‘undervalues the company’. SWIP’s client, Scottish Widows Unit Funds (SWUF), which is the largest shareholder in the UK Balanced Property Trust with 10.5%, is offering to buy out shareholders ‘at a price at, or close to, net asset value’.
The trust said this was not enough, claiming it ‘has received initial estimates from independent real estate brokers that show that the property assets of the company held in its subsidiary could be sold for an aggregate consideration in excess of valuation’.
It urged shareholders to take no further action until they received a circular setting out a trust, just three weeks after losing the management mandate to Cordatus Partners, which was set up by three of its former employees.
It called for an extraordinary meeting to replace the entire board and to vote on a reconstruction and voluntary winding-up. SWIP, which made about £4m a year in fees from the mandate, can also count on the support of its parent, Lloyds TSB, which owns a further 7.5% of the trust.
UK Balanced Property Trust was launched in March 2002 with SWIP as its investment manager. On 15 February this year, the board announced that it had served notice terminating SWIP's appointment, and had entered into legally binding heads of terms for the appointment of Cordatus Partners as the trust's investment manager, with effect from 1 May.
Cordatus was set up by the former top two in the SWIP property team, Tom Laidlaw and Mike Channing, plus Michael Cunningham, who was the UK Balanced Property Trust’s manager.