Fidelity Japan Trust Plc - Response to AJOT Announcement

4 April 2025

FIDELITY JAPAN TRUST PLC (the 'Company')

Response to AJOT Announcement

The Board of Fidelity Japan Trust Plc ("FJV" or the "Company") notes the announcement yesterday by AVI Japan Opportunity Trust Plc ("AJOT") regarding a proposal for the combination of the assets of FJV and AJOT by way of a scheme of reconstruction of FJV pursuant to section 110 of the Insolvency Act 1986 and a rollover of its assets into AJOT with a cash exit capped at 25% (the "AJOT Proposals").

The Board confirms that it considered, reviewed and rejected a non-binding indicative proposal it had received from AJOT in August 2024.  In addition, prior to publishing the Company’s 2024 final results on 27 March 2025 (the “2024 Final Results”), in which the Board recommended continuation of the Company at the forthcoming AGM, the Board gave careful deliberation to various options as well as verbal proposals from parties, including from the Board of AJOT.   

The Board of FJV believes that the Fidelity Japan investment team is one of the best resourced in the industry. Fidelity has had a presence in Japan since 1969 and has over US$13.1bn1 invested in Japanese equities’ mandates.  FJV has generated significant outperformance in the past and the Board believes that there will be a reversion to a market environment where the investment style of the Fidelity team will once again generate strong performance. Over the ten years to 31 December 2024, the Net Asset Value of FJV rose by 146% against 140% for the reference index. In 2019, FJV outperformed its reference index by 22%, and in 2020 it outperformed by 15.8%. The Board believes that investing requires an ability to withstand the gyrations of the markets and take a long-term view and that it will again see such levels of outperformance from FJV.

As set out in the 2024 Final Results, at the forthcoming AGM in May shareholders are being asked to vote in favour of continuation of FJV, an investment trust with a style very different from that of AJOT.  Linked to this is an unconditional tender offer for 100% of the Company’s issued capital (excluding shares in Treasury) following the three years to 31 December 2027.

David Graham, Chair of FJV, commented:

“The Board remains focused on ensuring the Company returns to delivering strong investment performance and is confident that the portfolio is well placed to benefit from the more positive outlook for the Japanese market. The Board of FJV, which has a duty to act in the best interests of all FJV’s shareholders, recommends shareholders vote in favour of continuation of the Company at the AGM in May 2025.

The Board believes it is appropriate to allow all shareholders a chance to vote on the Company’s continuation in May and does not consider it is in shareholders’ interests to take forward the AJOT Proposals in isolation at this time.  Regardless of the outcome of the continuation vote, the Board will always consider any proposal it receives as a matter of good corporate governance.” 

For further information:

 Source: Fidelity International. Data as of 31 December 2024.

¹ Performance data are calculated in GBP. The reference index is the TOPIX Total Return Index (in sterling terms). Prior to 22 May 2018, the reference index was the Russell Nomura Mid/Small-Cap Index (in sterling terms).

Link to AJOT announcement