A second merger within the space of two weeks has been announced in the listed property sector, pleasing fund managers who have been clamouring for consolidation to improve liquidity and help increase the size of smaller struggling companies. Arrowhead Properties and Gemgrow have announced an intention to merge, which has pleased to investors who believe Gemgrow’s management has underperformed and that the small fund should not have listed in the first place as it was too illiquid. Fairvest also recently announced its proposed merger with Safari Investments.

The boards of Arrowhead and Gemgrow said that they had agreed in principle to a transaction, which would result in the reverse takeover of Gemgrow by Arrowhead.Gemgrow is structured into A and B shares, which appeal to investors with different risk appetites. A shares holders, shareholders who tend to be risk averse, have a preferential claim to earnings and are paid their dividends before the B shares investors shareholde...

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