PLI Perpetual Income And Growth Investment Trust Plc

 
TIDMPLI 
 
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HEREIN DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION, 
INCLUDING IN THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF 
SOUTH AFRICA 
 
29 July 2020 
 
               Perpetual Income and Growth Investment Trust plc 
 
                           Results of Manager Search 
 
The Board of Perpetual Income and Growth Investment Trust plc (the "Company" or 
"PLI") has concluded its comprehensive search for a new manager with the 
credentials and capacity to deliver capital growth and real growth in dividends 
over the medium to longer term mainly from UK equities. 
 
Having considered a large number of proposals, the Board has agreed the heads 
of terms for a combination of the assets of the Company with Murray Income 
Trust PLC ("MUT") by means of a section 110 scheme of reconstruction under the 
Insolvency Act 1986 (the "Transaction").  MUT is managed by the UK Equities 
team at Aberdeen Standard Investments ("ASI").  The Board, which had been 
focused on finding the best manager for the Company, was very impressed by the 
investment strategy and approach put forward by ASI, as well as the strength of 
the team and its top quartile performance over the last 1, 3 and 5 years[1]. 
Moreover, the existing scale of MUT and the initiative demonstrated by the MUT 
board added to the attractions of the proposal.  Although consolidation rarely 
results from manager beauty parades, the Board was of the view that a 
combination of the two companies would bring additional benefits to PLI 
shareholders, by offering exposure to ASI's UK Equity strategy in a 
well-managed, and enlarged, investment trust with a highly competitive 
management fee. 
 
MUT, which has a similar investment objective to PLI, aims to provide a high 
and growing income combined with capital growth through investment in a 
portfolio principally of UK equities.  MUT is an AIC Dividend Hero, and intends 
to seek to retain this status, having grown its dividend for 46 consecutive 
years and currently has a yield of 4.5%[2].  The proposed Transaction will 
result in MUT being one of the largest investment trusts in the UK Equity 
Income sector, with gross assets in excess of GBP1 billion[2]. 
 
The Transaction will provide the Company's shareholders with an investment in a 
significantly larger investment trust with one of the lowest management fees in 
the sector (0.38% per annum[3]), with greater liquidity, and with a stronger 
investment track record and in recent years a better share price rating than 
PLI (4.5% 12-month average discount for MUT, compared with 13.1% discount for 
PLI[1]). 
 
The Company's shareholders will benefit from the extensive resource and 
experience within the UK Equities team at ASI, with Charles Luke as lead 
portfolio manager supported by the UK Equities team. ASI manages MUT with a 
differentiated investment process that has a quality focus coupled with an 
emphasis on environmental, social and governance factors based on fundamental 
analysis enabled by an extensive in-house research resource. MUT has a total 
return approach aiming to deliver an appealing and sustainable dividend yield 
allied to attractive capital and dividend growth potential.  Over the 5 years 
ending 30 June 2020, the NAV total return of MUT, which has a 5-star 
Morningstar rating, has been 5.6% p.a., representing outperformance of 2.6% 
p.a. against the FTSE All-Share index[1]. The ASI UK Equity Income Fund is the 
top performing fund in the IA UK Equity Income sector since Charles Luke 
started to manage the fund in 2016[1]. 
 
The Company has consulted with a number of its major shareholders who have 
indicated their support for the Transaction. 
 
The Transaction will be effected by way of a scheme of reconstruction of the 
Company under section 110 of the Insolvency Act 1986 resulting in the voluntary 
liquidation of the Company. In accordance with customary practice for such 
transactions involving investment trusts, the City Code on Takeovers and 
Mergers is not expected to apply to the Transaction. However, the Transaction 
will be subject to other regulatory and tax approvals. The Transaction will be 
subject to, inter alia, approval by the shareholders and noteholders of each of 
the Company and MUT.  As part of the Transaction, in order to manage the 
realisation/realignment of the Company's portfolio ahead of liquidation, it is 
proposed that Aberdeen Standard Fund Managers Limited ("ASFML") will be 
appointed as the alternative investment fund manager of the Company.  ASFML 
will not charge a management fee to PLI.  The formal termination of Invesco 
Fund Managers Limited and the appointment of ASFML is expected to become 
effective by no later than the end of September 2020. 
 
New MUT shares that are issued to PLI shareholders will be issued on a formula 
asset value ("FAV")-to-FAV basis. FAVs will be calculated using the respective 
net asset values of each company, adjusted for the costs of the Transaction, 
any dividends and distributions declared by each party which have a record date 
prior to the effective date of the Transaction, an allowance for the costs of 
liquidation (for PLI) and the cash exit option (for PLI, as defined below). 
ASFML has agreed to make a contribution to the costs of the Transaction by 
means of a reduction in the management fee payable by MUT to ASFML for the 
first six months following the completion of the Scheme.  The value of such 
reduction will be based on the value of the assets transferred by PLI to MUT as 
part of the Transaction and the reduction will be for the benefit of the 
shareholders of the enlarged MUT. 
 
It is expected that PLI shareholders will see a reduction in their overall 
share price yield given MUT has a lower, but still attractive, current yield 
than PLI, but it is believed that MUT has a more resilient portfolio income 
profile than the market.  MUT also has strong revenue reserves and an extensive 
record of dividend growth, which it intends to maintain.  Partly in recognition 
of the reduction in absolute dividends that a PLI shareholder would be expected 
to receive, the Board of PLI intends to pay a pre-liquidation interim dividend 
to its shareholders to reflect a distribution of its revenue reserve in full, 
such amount is anticipated to be approximately 13.6 pence per share[4].  PLI 
shareholders receiving MUT shares will rank fully for all dividends declared by 
MUT on or after the date of the issue of MUT shares to them. 
 
As part of the Transaction, the Company expects to offer its shareholders the 
ability to elect to receive cash in respect of some or all of their holdings in 
the Company at a price equal to 98% of FAV (the "Cash Option").  The Cash 
Option will be limited to 20% of the Company's shares in issue and aggregate 
elections for the Cash Option in excess of this number will be scaled back on a 
pro rata basis in favour of the rollover into MUT, which will also be the 
default option for the Transaction. 
 
The Board of MUT have invited Richard Laing, Alan Giles and Georgina Field to 
join the Board of MUT from the date of completion of the Transaction.  Bob 
Yerbury and Victoria Cochrane did not wish to be considered for a position on 
the MUT board and Mike Balfour stood aside as he would not be considered 
independent given he is on the board of another ASFML-managed investment 
company. 
 
A circular convening a general meeting to approve the Transaction will be sent 
to the Company's shareholders in due course, together with a prospectus 
published by MUT containing details of the MUT shares to be issued in 
connection with the Transaction.  It is expected that the Transaction will 
conclude in early Q4 2020. 
 
Richard Laing, the Company's chairman said "After a thorough tender process, 
when a number of excellent proposals were received, the Board of PLI is 
delighted to recommend to shareholders the combination of Perpetual Income & 
Growth and Murray Income Trust. We believe this decision will provide 
shareholders with strong potential for future capital growth and income 
generation. With very similar investment objectives to deliver growing income 
and capital growth from mainly UK equities, Murray Income Trust has 
demonstrated a consistent performance track record in doing both, with its NAV 
total return outperforming its benchmark FTSE All-Share index on an annualised 
basis by 8.8%, 3.6%, 2.6% and 1.6% over 1, 3, 5 and 10 years respectively[1]. 
We are confident that the depth and breadth of experience in Charles Luke, the 
lead portfolio manager of MUT, as well as the wider UK equity team at Aberdeen 
Standard Investments will continue to deliver for shareholders over the long 
run. 
 
"There are few mergers of investment trusts, but we believe that this 
Transaction will have great appeal to shareholders of PLI.  They will 
transition their interests at net asset value (after deduction of costs and 
adjusting for dividends), and with Murray Income shares typically trading at a 
narrower discount to PLI, should bring an immediate uplift. Our shareholders 
will become part of a trust that has an excellent track record and share price 
rating, one of the lowest ongoing charges ratio in the sector at an estimated 
0.50% per annum[3] (a significant reduction from PLI's present 0.73% per annum 
[5]), and an attractive yield of 4.5%[2] with the accolade of being an AIC 
Dividend Hero. It will also be one of the largest investment trusts in the UK 
equity income sector, with the liquidity and positioning that a trust with 
gross assets well over GBP1 billion brings." 
 
Notes 
 
1 As at 30 June 2020. Sources Morningstar, FTSE or Datastream. 
 
2 As at 28 July 2020, being the latest date prior to the publication of this 
announcement. Source: Datastream or Bloomberg. 
 
3 ASI is paid a variable management fee by MUT of 0.55% p.a. of the first GBP350m 

of net assets, 0.45% p.a. on the assets between GBP350 - 450m, and 0.25% p.a. on 
assets in excess of GBP450m. The weighted average annual management fee would be 
0.38% p.a. and the estimated pro forma ongoing charges ratio would be 0.50% 
p.a., based on the net assets of MUT and PLI, assuming the cash option is fully 
taken-up, as at 24 July 2020. Source: ASI. 
 
4 Based on revenue reserves at the latest date prior to the publication of this 
announcement. Source: Invesco. 
 
5 Source: PLI annual report and accounts for the year ended 31 March 2020. 
 
Important Information 
 
This announcement contains information that is inside information for the 
purposes of the Market Abuse Regulation (EU) No. 596/2014.  The person 
responsible for arranging for the release of this announcement on behalf of the 
Company is Paul Griggs of Invesco Asset Management Limited. 
 
LEI: 549300UIWJ7E60WUQZ16 
 
Contact Details 
 
Richard Laing, Chairman 
Contact through Winterflood or Montfort 
 
Winterflood Investment Trusts (Corporate Broker) 
Joe Winkley / Neil Morgan 
Telephone 020 3100 0000 
 
Montfort Communications 
Gay Collins - 07798 626282 
Miles McKechnie - 07788 546279 
Claire Lewis - 07825 588626 
pli@montfort.london 
 
 
 
END 
 

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