IC Top 100 Fund Witan Investment Trust (WTAN) has bought back 14.37m of its shares worth £105m at a discount to NAV of 6.5 per cent, following Aviva Investors' decision to offload its stake of 31.64m shares. This has resulted in an estimated uplift to net assets of £6.7m, amounting to 3.6p per share or 0.45 per cent of net assets.
More than half of Aviva's shareholding has been bought by other investors. These are believed to include wealth managers adding to existing holdings, as well as investors keen to exploit the relatively wide discount.
Before the plan was announced, the trust's discount to net asset value (NAV) was around 2.4 per cent but widened to more than 6.7 per cent, and the trust is still on a discount to NAV of around 5.5 per cent. But analysts think it could now tighten and even return to a premium to NAV - a level at which it traded for much of last year. It swung to a discount earlier this year as investors moved into less volatile assets amid market falls.
"The shares have been trading at around a 6 per cent discount in anticipation of the transaction, but we believe there is scope for the discount to narrow now that the overhang has been cleared," said Charles Cade, head of investment companies research at Numis Securities.
The repurchase has been funded from cash resources and the sale of investments. "We have a liquid portfolio of listed equities and were readily able to raise the funds from a range of managers for the buyback," explained a spokesperson.
Witan will hold these shares in treasury and can only sell them at a premium to NAV. This purchase of shares from Aviva is over and above the trust's ability to buy back up to 14.99 per cent of its ordinary shares.
