Scottish investment firm Alliance Trust has confirmed that it has received an informal merger approach from RIT Capital Partners, a London-based investment trust largely controlled by the Rothschild family.
The combination of the two businesses would lead to the creation of a publicly listed company with managed assets of over £5bn.
Alliance, which oversees nearly £2.6bn of assets, said that it has received an unsolicited approach but no detailed terms have been provided.
The company also revealed that it is reviewing its business, following several changes in the company. It has recently been embroiled in battles with activist investors that led to the departure of CEO Katherine Garrett-Cox and chairperson Karin Forseke earlier this year. The firm has appointed Robert Smith as the new chairman to replace Forseke.
"The board of Alliance Trust will incorporate any formal merger proposal received from RIT into its strategic review, alongside the other options being considered," Alliance said.
Alliance will now be in an offer period and will suspend share buy backs. RIT will have 28 days until 27 June to declare its firm intention to make an offer for Alliance.
"There can be no certainty that any transaction will result from the strategic review. In the interim, shareholders are strongly advised to take no action and to await the outcome of the board’s strategic review," Alliance added.
The Rothschild family owns a 21% stake in RIT, which is chaired by Lord Rothschild. The firm manages £2.4bn in assets.