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China trust bids for CST fund

Paul Durman
Thursday 29 April 1993 23:02 BST
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CHINA Investment Trust, a new company to be managed by Jupiter Tyndall, is raising pounds 11.2m through a placing and making a takeover bid for CST Emerging Asia Trust, writes Paul Durman.

CIT, the first investment trust to specialise in China, is offering CST shareholders 95 per cent of their trust's formula asset value (FAV). If they accept CIT shares instead of cash, they will also receive one warrant for every five shares.

CST announced it was in discussions with the new trust nine days ago. Jupiter Tyndall intends that CIT's offer should enhance shareholders' value in CST by narrowing the discount to net asset value. This stood at 27 per cent before Jupiter Tyndall announced its intentions last October.

Since access to China's stock market remains limited, CIT will invest in other closely connected economies, such as Hong Kong and Taiwan. The trust will have an initial life of 10 years.

CIT will be able to borrow up to the total of its capital and reserves, subject to an initial limit of pounds 10m. The trust does not intend to use these powers at present.

CIT's directors are James Roe, chairman of CST and a member of the Monopolies and Mergers Commission, John Duffield, chairman of Jupiter Tyndall, and Sir Richard Evans, a former ambassador to China.

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