REG - Franklin Global Tst - Combination with IGET

Franklin Global TrustAnnouncement

13/11/2025 09:45

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RNS Number : 4280H  Franklin Global Trust PLC  13 November 2025

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE,
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JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

This announcement is not an offer to sell, or a solicitation of an offer to
acquire, securities in any jurisdiction in which the same would be unlawful.
Neither this announcement nor any part of it shall form the basis of or be
relied on in connection with or act as an inducement to enter into any
contract or commitment whatsoever.

This announcement contains information that is inside information for the
purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as
amended (the Market Abuse Regulation).

13 November 2025

 

Franklin Global Trust plc

Legal Entity Identifier: 549300RKB85NFVSTBM94

Combination with Invesco Global Equity Income Trust plc ("IGET")

Introduction

The Board of Franklin Global Trust plc (the "Company" or "FRGT") is pleased to
announce that heads of terms have been agreed for a combination of the Company
and IGET (the "Combination"). The Combination will be implemented through a
scheme of reconstruction of the Company under section 110 of the Insolvency
Act 1986 (the "Scheme"), under which the Company's shareholders
("Shareholders") will be entitled to elect to receive new shares in IGET
and/or cash.

Invesco Fund Managers Limited ("Invesco") will continue to manage the
enlarged IGET's portfolio in accordance with IGET's existing investment
objective and investment policy.

 

Benefits of the Combination

The Board believes the Combination should deliver the following benefits for
Shareholders:

·      Strong absolute and relative investment performance:

For periods to 31 October 2025

o  IGET has outperformed all Global Equity Income peers 1  (#_ftn1) over
three and five years and has outperformed all Global Equity peers 2  (#_ftn2)
over five years, in both net asset value ("NAV") and share price total
returns.

o  IGET has delivered NAV total returns of 74.5 per cent. and 140.3 per cent.
over three and five years respectively, outperforming its benchmark (the MSCI
World Index) total returns of 57.9 per cent. and 103.0 per cent. over the
corresponding periods.

o  IGET has delivered share price total returns of 103.1 per cent. and 152.0
per cent. over three and five years respectively.

Past performance is not a guide to the future.

·      Access to the market leading resources of Invesco:

o  The enlarged IGET is managed by Invesco, a subsidiary of Invesco Limited,
a global asset manager with US$2.1 trillion of AUM, including US$32.2 billion
managed by the Invesco Global Equities team (as at 30 September 2025).

o  IGET benefits from the expertise of its award-winning Portfolio Managers,
Stephen Anness and Joe Dowling, and from the depth of resource and experience
offered by the wider Global Equities team.

·      Improved share rating: Shareholders are expected to benefit from
an immediate uplift in value should the relative trading levels continue,
with IGET currently trading on a premium NAV of 1.9 per cent compared to
FRGT's discount to NAV of (2.6) per cent 3  (#_ftn3) .

·      Scale: It is expected that the Combination will deliver a
significant increase in the size of the enlarged IGET, with net assets of up
to £445 million following the Combination, depending on cash elections. With
greater scale, the enlarged IGET is expected to appeal to a broader range of
investors, which should result in higher trading volume and market liquidity
in the enlarged IGET's shares compared to either FRGT or IGET historically.

·    Enhanced dividend: IGET has adopted and will maintain an enhanced
dividend policy, which pays an annual dividend of at least 4 per cent. of the
unaudited previous year-end NAV, paid quarterly in equal amounts.

·      Opportunity for full cash realisation: Shareholders will have
the opportunity to elect to realise some or all of their holding for cash,
should they not wish to roll over into IGET.

·      Cost Contributions: Shareholders opting for the Rollover Option
(as defined below) should be largely insulated from the costs of the Scheme
because of the Cost Contributions (as defined below), as a result of which any
impact to NAV per share for shareholders of the enlarged IGET is expected to
be immaterial.

·      Tax-efficient rollover: UK Shareholders will have the opportunity
to roll over their investment from the Company to IGET without triggering a
capital gains tax charge, subject to the customary tax clearances being
received.

 

Background to the Combination

The Board has been conscious for some time of the challenges facing the
Company, most notably disappointing investment performance and diminishing
size.

The Company's performance has had a significant impact on demand for the
Company's shares, which, given the Company's zero discount policy, has
resulted in the Company repurchasing a significant number of its own shares.
This has had a material impact on the size of the Company, with the Company's
market capitalisation reducing from £300 million to £182 million over the
last five years 4  (#_ftn4) .

After consulting with the Company's major Shareholders about their objectives
for their holdings in the Company, the Board conducted a thorough review of
the Company's investment management arrangements, with proposals sought from a
number of parties. The Board believes that, among the options considered, the
proposal put forward by IGET offers significant benefits and that the
Combination represents the most compelling outcome for Shareholders.

 

The Scheme

The Scheme will be effected by way of a scheme of reconstruction of the
Company under section 110 of the Insolvency Act 1986, resulting in the
voluntary liquidation of the Company and the transfer of certain of the
Company's assets to IGET in consideration for the issue of new ordinary
shares of IGET ("New IGET Shares") to Shareholders who elect to roll over
into IGET. The number of New IGET Shares issued to Shareholders will be
determined on a formula asset value ("FAV") for FAV basis.

The Scheme will be subject to, inter alia, the approval of both the Company's
and IGET's shareholders, in addition to tax clearances and regulatory
approvals. Subject to, and conditional on, the Scheme becoming unconditional,
qualifying Shareholders will be entitled to elect to receive in respect of
some, or all, of their FRGT shares:

i.   New IGET Shares ("Rollover Option"); and/or

ii.   cash (the "Cash Option"). The Cash Option will be unlimited, with all
valid elections accepted.

New IGET Shares will be issued as the default option under the Scheme in the
event that Shareholders do not make a valid election under the Scheme or only
elect for the Cash Option in respect of a portion of their shares. The Cash
Option will be offered at a discount of 2 per cent. to the FRGT FAV per share
(the "Cash Option Discount").

In accordance with customary practice for such transactions involving
investment trusts, the City Code on Takeovers and Mergers is not expected to
apply to the Scheme.

 

The Cost Contributions

Each company will bear its own costs relating to the Scheme, with the enlarged
IGET bearing any stamp duty or listing costs relating to the New IGET
Shares.

The benefit of the Cash Option Discount will be allocated first to pay FRGT's
costs, with any balance of the Cash Option Discount allocated to the benefit
of the enlarged IGET.

Invesco has agreed to make a contribution to the costs of the Scheme
equivalent to twelve months' management fee on the value of the assets, as at
the calculation date, to be transferred to IGET pursuant to the Scheme (the
"Invesco Cost Contribution"). The Invesco Cost Contribution will be allocated
first to pay IGET's costs, with any balance of the Invesco Cost Contribution
allocated to the benefit of the enlarged IGET.

It is expected that the benefit of the Invesco Cost Contribution and the Cash
Option Discount (together the "Cost Contributions") should mean that
Shareholders opting for the Rollover Option will suffer little or no NAV
dilution.

 

Board structure

Following completion of the Scheme, it is expected that FRGT's Chairman,
Christopher Metcalfe, will join the Board of IGET.

 

Discount management

The Company's zero discount policy, which has the objective of providing
Shareholders, in normal market conditions, with assurance that the Company's
share price is in continuing alignment with the prevailing net asset value per
share, will continue until either the current authority is fully utilised or,
if earlier, the first Scheme general meeting. Should the authority be fully
utilised before the Scheme effective date the Company will not seek to renew
the authority given the upcoming cash exit opportunity which is on offer as
part of the Scheme.

As announced in IGET's annual report, the IGET Board will continue, in normal
market conditions, to actively use its authority to issue or buy-back shares
to manage the volatility of the premium or discount. The enlarged IGET will
use its buyback authorities with the objective of maintaining a discount no
wider than mid-single digits on a sustained basis.

 

Expected timetable

In light of the Prospectus Regulation Rules change in January 2026, in order
to achieve cost savings, it is intended that the documentation in connection
with the Scheme will be posted to each of IGET's and FRGT's shareholders
in January 2026 after the changes to the Prospectus Rules become effective
with a view to convening general meetings thereafter. The Scheme is expected
to be effective in February 2026.

 

Christopher Metcalfe, Chairman of Franklin Global Trust plc, said:

'The Board undertook a thorough review of all available options for the
Company's future. We believe IGET's proposal offers many attractive features,
including enhanced scale, improved liquidity, a strong record of investment
performance, as well as a full cash alternative for Shareholders. The Board
intends to roll its holdings into the new, enlarged IGET vehicle and looks
forward to the future with confidence.'

Enquiries:

 

 Franklin Global Trust plc                      c/o J.P. Morgan Cazenove

 Christopher Metcalfe, Chairman

 J.P. Morgan Cazenove (Sole Financial Adviser)  +44 (0) 20 3493 8000

 William Simmonds

 Rupert Budge

 

 1  (#_ftnref1) Those investment companies in the AIC's Global Equity Income
sector.

 2  (#_ftnref2) Those investment companies in the AIC's Global Equity sector.

 3  (#_ftnref3) As at close of market on 11 November 2025

 4  (#_ftnref4) From 11 November 2020 to 11 November 2025

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