STS drafts in Tulchan to fight hostile bid

Securities Trust of Scotland (STS) has called in Tulchan Communications as it battles a hostile takeover approach from rival investment trust Perpetual Income & Growth (PIGIT).

Martin Currie, which manages the £470m fund, said STS had been obliged to bring in a fresh PR agency on the bid after Lansons Communications resigned the account to work for PIGIT.

Tulchan consultants Kirstie Hamilton and Kate Inverarity are leading the account for STS, which rejected PIGIT's bid this Tuesday.

Lansons already handles PR for PIGIT manager Invesco Perpetual. Lansons chief executive Tony Langham leads the PIGIT account.

Lansons' work for PIGIT does not affect the company's activity for Martin Currie, to which the agency continues to be retained.

PIGIT announced its bid plans last Thursday and was due to post offer documents to all 12,000 STS shareholders this week.

PIGIT will offer £109m of its bid in cash, presenting shareholders with a 33 per cent premium on their holdings, which have traded at a 15 per cent discount to STS's net asset value over the past 12 months.

The move follows STS's rejection of a friendly PIGIT approach.

STS has described PIGIT's hostile offer as 'opportunistic' and has estimated that it would cut shareholders' gross income by up to 31 per cent.

STS is also arguing that PIGIT's offer is only a small premium to STS's current share price and that it intends to pay a similar premium in a planned dividend payment to shareholders.

Over the past five years, PIGIT's value has risen by 85 per cent, compared with a three per cent decline for STS.

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