GCP trust merger scrapped after shareholders raise concerns

The plan was for GABI to be wound up and its assets transferred to GCP Infra

Funds face challenging search for independent directors


The proposed merger of GCP Infrastructure Investments (GCP Infra) and the GCP Asset Backed Income Fund (GABI) has been scrapped due to opposition from shareholders.

On 11 August, a plan was announced for GABI to be wound up and its assets transferred to the GCP Infra in exchange for shares. The merged trust would have been worth about £900m. GCP Infra said in a stock exchange announcement that it is ‘no longer in discussions regarding a proposed combination’.

“We understand that a divergence of views exists regarding the merits of the scheme among shareholders of GAB,” the trust said. “The board has no desire, were the scheme to be successful, to create an enlarged entity with a significant minority of investors in such entity opposed to it. The board considers that such circumstances would risk the ability of the scheme to achieve its intended purposes.”

See also: “Ediston Property Investment Company sells entire portfolio in £200m deal”  

The trust, in coordination with Gravis Capital Management which acts as the investment adviser, added that they are grateful for the engagement and feedback from shareholders and will look at other options following the cessation of the scheme to merge the two.

They said they remain committed to delivering a strategy that accelerates the company’s capital reallocation. The aim is to reduce the current £104m debt burden and buy back shares.

Chair of GCP Infra, Andrew Didham, commented: “The board negotiated the scheme on the basis it would, if completed, accelerate the company’s ability to re-allocate capital. 

“The board recognises, however, that the scheme’s success in achieving these objectives is likely to be reduced in a scenario where the scheme completes but a large minority of GABI shareholders were not supportive of such completion. 

“In light of the feedback received we have agreed with GABI to terminate ongoing discussions relating to the scheme. The company looks forward to progressing with its capital re-allocation strategy supported by accelerated and pro-active recycling of the portfolio where possible.”

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