Asia Dragon and New Dawn trust merger approved

The merger of the Asia Dragon and New Dawn Asian equities investment trusts has been approved by shareholders.

New Dawn’s £214.7m in assets will now be absorbed by Asia Dragon to create a single trust with more than £700m in assets.

As payment, 52,895,670 new shares in Asia Dragon will be issued to New Dawn shareholders. This reflects a conversion ratio of 0.675514 new shares for every New Dawn share. New Dawn shareholders were also offered a partial cash exit option.

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The two trusts have similar strategies and hold many of the same stocks. The merger aims to create efficiencies in the management and improve liquidity.

The fee on the newly-enlarged Asia Dragon is set to be dropped to 0.75% from 0.85%.

The proposed deal was announced in July and full details were circulated to shareholders in September.

Shares in Asia Dragon are trading at 335p today (9 November), for a market cap of £335m. The trust is at an 18% discount to net asset value.