F&C is hoping to prevent its Commercial Property trust (FCPT) being merged into the UK Commercial Property trust by offering an alternative deal.
This morning, the board of FCPT has agreed to a takeover by the Ignis-managed UK Commercial Property trust (UKCPT).
Under the terms of the deal, FCPT Shareholders will receive new UKCPT shares on a NAV for NAV basis. Alternatively, there is the option of a cash exit for FCPT shareholders at 91p per share.
Although subject to shareholder approval, the enlarged UKCPT would become the sixth largest UK listed property company, with a market capitalisation of £1.6bn. It is also expected to lead to a reduction in the TER to 0.7%.
However, F&C says its proposal would offer reduce costs in a fund which has shown strong investment performance.
"Our proposal would provide a significant reduction in the company's total expense ratio; continuity of asset management, including the retention of Richard Kirby as lead manager; and it would preserve investor choice between two distinct, large and liquid vehicles," it says.
"We are disappointed to have been served with notice given the continued strong performance of the portfolio under F&C REIT's management has achieved top quartile performance among portfolios monitored by IPD over one, three and five years to 31 March 2010."
F&C has highlighted the fact that minority shareholders will get a chance to vote of the proposal which has already been supported by Friends Provident and Ignis parent Phoenix Group, major shareholders in FCPT.if the merger goes head, this would be the third investment trust mandate F&C has lost this year.
In February, Edinburgh Partners took over the renamed European Investment trust, while First State is due to take of control of the Pacific Assets trust in July.
