RIT Capital Partners, a London-based investment trust largely controlled by the Rothschild family, has abandoned plans to buy investment firm Alliance Trust.
Alliance Trust confirmed merger approach from RIT last week. The integration of the two firms would have created one of the largest investment trusts in the UK with a market value of more than £5bn.
"Following careful analysis and constructive discussions with representatives of Alliance Trust, RIT has concluded that it would not be in the best interests of its shareholders to make an offer for Alliance Trust," RIT cited.
Alliance Trust is recently going through major internal reforms. The firm has been involved in battles with activist investors that resulted in the departure of CEO Katherine Garrett-Cox and chairperson Karin Forseke earlier this year. Forseke has now been replaced by Robert Smith as the new chairman.
The trust said that it has started a strategic review, and has already made good progress that include "cutting costs, narrowing the discount to net asset value and allowing for the creation of an independent board of directors".
The company said that it would continue to suspend share buybacks till the completion of the review.