STANDARD Life's GBP74m Edinburgh Small Companies, one of the most successful investment trusts in its sector, has narrowly survived an attack by arbitrage investors, with 52per cent of shareholders voting for the continuation of the trust.

The board had set a lower limit of 50per cent on acceptances.

A tender offer made in response to pressure from Isle of Man-based Laxey Partners and other arbs, who had built up a 40per cent stake between them, has been accepted by only 48.4per cent of shareholders. The tender offer had been for up to 50per cent of the shares.

Gordon Humphries, head of investment companies at Standard Life Investments, said: ?We're obviously delighted that the trust has survived, albeit now at half the size. When you take into account that Laxey and other shortterm shareholders owned more than 40per cent of the Trust, to get a result where only 48per cent of shareholders tender their shares is no mean achievement. This outcome highlights the confidence that long-term shareholders have in Standard Life Investments, as investment manager, and the excellent performance that has been generated over the last three years."

Humphries added: ?This result is important not just for the trust but also for the whole sector. If the top-performing UKSmaller Companies trust cannot survive then it calls into question the viability of the sector, and indeed the future of investment trusts in general. We now look forward to building the trust and continuing to deliver excellent performance for our investors."

Over the last 12 months the trust has been the best performing smaller companies investment trust, with a rise of 43per cent in net asset value and 50per cent in share price.

The GBP110m Dunedin Smaller Companies trust, run by Aberdeen Asset Management, is under similar attack, this time from Carrousel Capital which has a 23.7per cent stake and is backing a tender for up to 30per cent of its shares.