Tom Aylott, Portfolio Adviser, 17 April 2025:
Fidelity Japan will be open to bids for a potential merger from other investment trusts if its upcoming continuation vote is approved, according to a stock exchange announcement this morning (17 April).
It received a merger proposal from AVI Japan Opportunities earlier this month but has since been met with “a small number of unsolicited and credible indicative proposals from outside parties”.
The board will therefore “invite formal proposals to be made privately” from the other interested parties if it passes its continuation vote on 21 May, which it “does not expect to be approved by a majority of shareholders”..
A merger between the two trusts would results in a larger vehicle, with both having combined assets under management of £401m, as well as a lower discount. Shares in AVI Japan Opportunities are trading at a 2.4% discount versus 9.1% for Fidelity Japan..
James Carthew, head of investment company research at QuotedData, said a potential merger had been on the cards for a long time following Fidelity Japan’s underperformance and widening discount.
“We had already suggested that JPMorgan Japan would be a good fit for Fidelity Japan, but this makes equal sense,” he added. “AVI Japan Opportunity’s track record and prospects mean that it deserves to be much bigger than it is.”
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