F&C defeats £1.6bn property trust vote

Minority shareholders in F&C Commercial Property trust (FCPT) have rejected a proposed takeover by Ignis-managed UK Commercial Property trust (UKCPT) to create a £1.6bn vehicle.

The proportion of votes cast against the proposal were 50.07% compared to 49.93% for the plan.

Although the merger had been approved by the FCPT board and two of its major shareholders, Friends Provident and Ignis' parent Phoenix Group, minority stakeholders had to approve the deal for it to go ahead.

The decision means the two trusts will continue separately under their existing management teams.

Arguments in favour of the merger included lower costs and a more liquid portfolio.

However, F&C has vehemently opposed the merger, citing FCPT's good performance. It was backed by at least three brokers including Numis Securities' Charles Cade who warned arguments in favour of the merger were "not compelling."

As part of defence of the bid, F&C proposed a fee cap of 0.6% of total assets while Ignis were offering to lower the TER to 0.7%.

The vote ends a run of bad news for F&C's investment trust business. In February, Edinburgh Partners took over the renamed European Investment trust, while First State has taken control of the Pacific Assets trust. F&C also closed its UK Select trust.