Scottish Widows has issued its battle plan to investors ahead of the meeting that will decide the fate of the £440m property trust at the centre of a bitter legal dispute.

In a circular issued to shareholders ahead of an EGM of the UK Balanced Property Trust, on 31 July, 28% shareholder Scottish Widows Unit Fund said the board of the trust should have made public the details of any other offers for the portfolio by now and that their offer for the trust was the only way for shareholders to be certain of maximising value.

The board also outlined a provisional offer for the trust, stating that it would offer 163p a share had the net asset value been calculated on June 30, the day after the trust announced poor end of year results for the year ending 31 March.

In a statement issued on 24 May, the trust’s board said it had received provisional offers for its portfolio which valued it at 165.3p a share, and valued the SWUF offer at 160p per share.

In their end of year results, the board announced that the trust would be wound up, rather than sold as a going concern.

The trust is at the centre of a bitter row between Scottish Widows, the fund’s former manager through Scottish Widows Investment Partnership, and the board.

SWIP’s top property duo, Tom Laidlaw and Mike Channing,

left to start their own fund management business, Cordatus, and were awarded the trust mandate by the board immediately after their garden leave expired.

The homes and offices of the duo were raided by the Scottish Court of Session in April, as part of an investigation instigated by Scottish Widows into whether the pair had breached the terms of their contract.

A hearing is expected to decide whether Widows will be allowed to proceed with a case against Laidlaw and Channing when the Court reconvenes after its summer recess in September.

SWUF has proposed that the board be replaced with another of their own choosing, and that shareholders be given the option

of cashing out their investment, or rolling it over into a new vehicle that SWIP would manage.

In a letter sent with the circular, SWUF chairman Jim McConville said: ‘We have delayed sending our response as we had expected the existing board to have announced full details of any proposals that it may now have. It has not done so.

‘Accordingly, Scottish Widows Unit Fund’s proposals remain the only firm proposals on the table and offer shareholders choice, full value and certainty and are expected to be capable of being implemented by the end of September 2007.’

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