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(Sharecast News) - European Opportunities Trust said on Friday that it has begun a strategic review of the future of the company, which could result in a merger or cash exit, as it conceded it was unlikely to meet performance targets.
The trust - whose top 10 holdings include Genus, Novo Nordisk and Experian - said that over the last three years, the board has been pro-active in seeking to enhance shareholder value.
This includes share buybacks, two substantial tender offers, and measures to lessen the costs of ownership through two management fee reductions.
"However, the board acknowledges the ongoing performance challenges and consider that it is likely that the company will not meet the performance condition under the performance-related tender offer scheduled for later this year," it said.
"The board is also cognisant of the three-yearly continuation vote to be held at this year's annual general meeting."
Having consulted with a number of its major shareholders, the trust has concluded it is appropriate to conduct a strategic review in which it will "pro-actively" consider a number of options. These may include a possible combination with another closed-ended fund by means of a scheme of reconstruction and a cash exit at close to NAV.
They will also include an outline proposal which has been received from River Global, Devon Equity Management's parent company, in respect of a roll-over into a proposed open-ended investment company with a similar investment policy.
"Through the strategic review, the board will consider the merits of these options for shareholders in isolation or a combination thereof," it said.
The trust added that there is no certainty any changes will result from the review.
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