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Fidelity Japan Trust PLC on Tuesday said it has agreed heads of terms for a proposed rollover of its assets into AVI Japan Opportunity Trust PLC, with shareholders able to elect to receive new AJOT shares or cash for up to half of their holdings. The move follows FJV’s failed continuation vote in May and a board review of strategic options. AJOT first proposed a merger in August 2024, arguing that a larger combined trust would deliver better value. Under the plan, the combination will be implemented via a scheme of reconstruction under the Insolvency Act, resulting in the voluntary liquidation of FJV. New AJOT shares will be issued on a formula asset value basis, while the cash option will be priced at a 1% discount and capped at 50% of FJV’s issued share capital. AJOT’s investment manager, Asset Value Investors, will continue to manage the enlarged trust under its current strategy of investing in undervalued small- and mid-cap Japanese equities and engaging with management to unlock value. Norman Crighton, chair of AJOT, said: ‘We are pleased to have reached agreement with the Fidelity Japan Trust board for a proposed rollover into AVI Japan Opportunity Trust. As AJOT set out last year, and again in April 2025, we strongly believe that this combination could unlock greater returns and continued outperformance for existing shareholders of both trusts. ‘An enlarged AJOT will have greater firepower to capitalise on what we consider are once-in-a generation structural corporate governance reforms in Japan, focusing on under-valuation in the vast opportunity set of smaller cap Japanese equities, backed by AJOT‘s discount control mechanisms.’ Since its 2018 launch, AJOT has delivered a 102% net asset value total return in GBP terms, outperforming the MSCI Japan Small Cap index’s 41% gain and the TOPIX’s 53% rise. AJOT shares have traded at a narrower discount to NAV than FJV’s over the same period. Completion is targeted by the end of November 2025, subject to shareholder and regulatory approvals. Shares in Fidelity Japan were up 2.0% at 207.00 pence in London on Tuesday morning for a total market capitalisation of £235.3 million. Shares in AVI Japan Opportunity Trust were down 0.1% at 178.40 pence for a capitalisation of £242.3 million. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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