Notafettler
Guest
I bought these on a 26% discount (discount are always out of date by at least one day). That is 74p for every 100p worth of assets (underlying shares owned by the investment Trust). It traded at an average of 16% discount for the previous year. A terrible investment trust over 5 years excellent for the previous 15 years. The manager and management company had been sacked from the Edinburgh investment Trust. The assumption by me and to certain degree the market was he would get the sack from perpetual. He did in April and the shares jumped 6% and drifted back down. The directors then do whats called a "beauty parade" for a new manager, which should take 6 months. A good choice was a merger with Edinburgh. Which would result in lower cost both management and ongoing. A big surprise after four months they decided on a merger with Murray income. For perpetual a very big reduction in costs smaller for Murray. But the merger terms were staggeringly good for perpetual.
1 perpetual gets shares in Murray at NAV (the underlying asset values of perpetual not there share price)
2 the dividend reserve of perpetual is paid to them before the merger. (basically doubling my dividend for the year)
3 Perpetual shares up Murray income shares down...which means we (perpetual gets more shares for our money)
I doubled up immediately. The market has drifted down so on average I am only 5% up but still am on very tasty dividend.
Murray pays a lower dividend but its share price growth is considerably higher. Not difficult when perpetual is down about 40% over 5 years.
Both perpetual shareholders and Murray income shareholders have to agree? I maybe being very hopeful that Murray shareholders will vote for the merger.
The point of course is there is always a certain amount of luck involved.
