Commercial Finance Specialists

A proposed merger of property investment vehicles is not in the best interests of F& Commercial Property Trust shareholders, according to an expert.

Shareholders in the F&C Commercial Property Trust will lose out if the proposed merger with Ignis' UK Commercial Property Trust goes through, it is claimed.

According to Paul Locke of City analysts Cannacord, the F&C vehicle will be mixing its portfolio with assets of an inferior grade, which will lead to a compression in the value of its key commercial development holdings.

While there may be some benefits to such a deal, there are still a number of key questions that remain unresolved, the analyst claims.

Richard Kirby, who heads the F&C fund, has confirmed he will not be involved in the management of the merged property investment firms, yet Canncord believes he has been the key factor in F&C's success thus far.

"We question whether this is the case here and whether the respective boards are performing their overriding duty and acting in the interests of all, or whether they are simply driven by the desires of the largest shareholders," said Mr Locke.

It was recently announced that the merger was to face opposition from F&C Asset Management, which was to propose a counter offer.

Posted by Allan Flowers.