REG-Fidelity European Trust Plc: Publication of Prospectus and Circular

Fidelity European TrustAnnouncement

21/08/2025 14:15

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN,
INTO OR FROM THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, THE
REPUBLIC OF SOUTH AFRICA, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA OR
ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

This announcement is not an offer to sell, or a solicitation of an offer to
acquire, securities in the United States or in any other jurisdiction in which
the same would be unlawful. Neither this announcement nor any part of it shall
form the basis of or be relied on in connection with or act as an inducement
to enter into any contract or commitment whatsoever.

21 August 2025

Fidelity European Trust PLC

Publication of Prospectus and Circular in connection with the proposed
combination of the Company with Henderson European Trust plc

Introduction

As announced on 19 June 2025, the Board has agreed terms with the board of
Henderson European Trust plc ("HET") in respect of a proposed combination of
the assets of the Company with the assets of HET. The combination, if approved
by Shareholders and HET Shareholders, will be effected by way of a scheme of
reconstruction and members' voluntary winding up of HET under section 110 of
the Insolvency Act 1986 (the "Scheme") and the associated transfer of part of
the assets, cash and undertaking of HET (and potentially certain liabilities
of HET pursuant to the Proposed Novation) to the Company in exchange for the
issue of new ordinary shares in FEV (the "New Shares") to continuing HET
Shareholders (the "Issue" and together with the Company's participation in the
Scheme being the "Proposals").

The Board announces that the Company has today published a prospectus (the
"Prospectus") in relation to the Issue, together with a circular to provide
Shareholders with further details of the Proposals and to convene a general
meeting of the Company (the "General Meeting") to seek approval from
Shareholders for the implementation of the Proposals (the "Circular").
Capitalised terms used in this announcement shall, unless the context requires
otherwise, have the meanings ascribed to them in the Circular.

Following implementation of the Scheme, it is intended that the Company's
Portfolio will continue to be managed on the same basis as it is currently. In
particular, the Company's existing investment objective and policy will not
change as a result of the implementation of the Proposals, and the Portfolio
will continue to be managed by Fidelity, with Sam Morse and Marcel Stötzel
continuing as the Portfolio Managers.

The Board of the Company believes that, if implemented, the Proposals will
result in a number of benefits for both the Company's and HET's shareholders,
as well as for future investors in the combined entity (the "Combined
Entity").

In particular, all Shareholders are expected to benefit from lower tiered
management fees and a lower ongoing charges ratio ("OCR") following completion
of the Proposals. On a blended rate basis, the Company's annual management fee
is expected to drop to 0.63 per cent. (from 0.70 per cent.) and the Combined
Entity will target an illustrative OCR of 0.68 per cent., representing a
material improvement to FEV's last reported OCR of 0.76 per cent.12 The Board
also believes that Shareholders will benefit from the unparalleled scale and
enhanced profile of the Combined Entity. In addition, Fidelity has agreed to
make a material contribution towards the costs of the Proposals which is
expected to fully offset the Company's direct and indirect transaction costs
(and partially offset the FEV Proposed Novation Costs).

In order to effect the Proposals, FEV Shareholders are required to approve the
Issue at the General Meeting. The Scheme is also subject to, among other
things, the approval of HET Shareholders at the HET General Meetings.

Overview of the Scheme

The Proposals will be effected by way of a scheme of reconstruction of HET
under section 110 of the Insolvency Act, resulting in the members' voluntary
winding up of HET and the transfer of part of HET's assets, cash and
undertaking (and potentially certain liabilities of HET pursuant to the
Proposed Novation) to the Company in return for the issue of New Shares by the
Company on a formula asset value ("FAV") for FAV basis.

Under the Scheme, Eligible HET Shareholders will be deemed to have elected to
receive New Shares in respect of their HET Shares (the "Rollover Option") to
the extent that they have not validly elected (or are not deemed to have
elected) to receive cash in respect of their HET Shares (the "Cash Option").

The maximum number of HET Shares that can be elected (or deemed to have been
elected) for the Cash Option is 33.3 per cent. of the total number of HET
Shares in issue (excluding HET Shares held in treasury) as at the Calculation
Date (the "Maximum Cash Option Shares"). HET Shareholders are entitled to
elect for the Cash Option in respect of more than 33.3 per cent. of their
individual holdings of HET Shares (the "Basic Entitlement", such excess amount
being an "Excess Application"). However, should total elections and deemed
elections for the Cash Option exceed the Maximum Cash Option Shares, Excess
Applications for the Cash Option will be scaled back into New Shares in a
manner that is, as near as practicable, pari passu and pro rata, by reference
to the number of HET Shares elected under such Excess Applications, among all
HET Shareholders who have made such Excess Applications such that the
aggregate number of HET Shares elected (or deemed to have been elected) for
the Cash Option will be no more than the Maximum Cash Option Shares.

The Cash Option will be offered at a discount of 1.75 per cent. to the
Residual HET Formula Asset Value attributable to those HET Shares in respect
of which valid elections or deemed elections have been made for the Cash
Option (following any scaling back required in accordance with the Scheme)
(the "Cash Option Discount"). Each HET Shareholder who elects, or is deemed to
elect, for the Cash Option will receive an amount in cash equal to their pro
rata share of the net realisation proceeds of the Cash Pool created pursuant
to the Scheme to reflect the number of HET Shares held by such HET Shareholder
that have been elected, or are deemed to have been elected, for the Cash
Option. The aggregate value arising from the application of the Cash Option
Discount (the "Cash Uplift") will be applied for the benefit of HET
Shareholders who are deemed to have elected for the Rollover Option.

New Shares will be issued as the default option under the Scheme to the extent
that Eligible HET Shareholders do not make (or are not deemed to make) a valid
election for the Cash Option in respect of some or all of their HET Shares
under the Scheme and to the extent that elections for the Cash Option
(including Excess Applications) are scaled back as a result of the Cash Option
being oversubscribed. The terms of the Scheme as they relate to Excluded HET
Shareholders (including Overseas HET Shareholders) are described in further
detail in the Prospectus and the Circular.

Benefits of the Proposals

The Board believes that, if implemented, the Proposals will result in a number
of benefits for both the Company's and HET's shareholders, as well as for
future investors in the Combined Entity, including:
* Unparalleled scale and enhanced profile: the Combined Entity is anticipated
to have Net Assets in excess of £2.1 billion.1 As the flagship UK
closed-ended vehicle for investment in Europe, the Combined Entity is expected
to benefit from enhanced profile and marketability.
* Lower tiered management fees: Fidelity has agreed that, with effect from
Admission, the Annual Management Fee payable by the Combined Entity will be
reduced to: 0.70 per cent. of Net Assets up to and including £400 million;
0.65 per cent. of Net Assets in excess of £400 million up to and including
£1.4 billion; and 0.55 per cent. of Net Assets in excess of £1.4
billion (the "Revised Fee Arrangements"). This is currently expected to
result in a blended annual management fee rate for the Combined Entity of 0.63
per cent. of Net Assets on completion of the Proposals.3
* Lower ongoing charges ratio ("OCR"): owing to the Revised Fee Arrangements
and the economies of scale of the Combined Entity, the Proposals are expected
to reduce the Company's OCR significantly, allowing it to target an
illustrative OCR of 0.68 per cent. for the Combined Entity, representing a
material improvement to FEV's last reported OCR of 0.76 per cent.1 2
* Enhanced liquidity: the scale of the Combined Entity, as the UK's largest
and most liquid European-focused investment trust, is also expected to further
enhance secondary market liquidity for the Company's shareholders (including
in relation to its enhanced discount management policy as described further
below).
* Significant cost contribution from Fidelity: Fidelity has agreed to make a
material contribution towards the costs of the Proposals, equivalent to a
waiver of 12 months of management fees that would otherwise be payable in
respect of the net assets transferred to the Company under the Scheme.
This is expected to fully offset the direct transaction costs for Existing
FEV Shareholders (and partially offset the FEV Proposed Novation Costs).1
* Enhanced discount management policy: in the light of the Proposals, the
Board of FEV has decided to enhance its discount management policy such that
the Company will seek to maintain any discount to net asset value in
mid-single digits in normal market conditions.
* Shareholder register: the implementation of the Proposals would allow a
number of shareholders to consolidate their holdings across FEV and HET whilst
also creating a more diversified shareholder base through a combination of the
two share registers.
Conditions of the Proposals

Implementation of the Proposals is subject to a number of conditions,
including:
* the passing of the HET Resolutions to be proposed at the First HET General
Meeting (to be held on 9 September 2025) and the Second HET General Meeting
(to be held on 26 September 2025) or any adjournment of those meetings, and
such HET Resolutions becoming unconditional in all respects;
* the passing of the Resolution to approve the issue of the New Shares at the
General Meeting (to be held on 15 September 2025), or any adjournment thereof,
and such Resolution becoming unconditional in all respects;
* the approval of the FCA to amend the listing of the HET Shares to reflect
their reclassification as shares with "A" rights and shares with "B" rights
for the purposes of implementing the Scheme;
* the FCA agreeing to admit the New Shares to listing in the closed-ended
investment funds category of the Official List and the London Stock Exchange
agreeing to admit the New Shares to trading on its Main Market, subject only
to allotment; and
* the Directors and the HET Directors resolving to proceed with the Scheme.
Unless the conditions referred to above have been satisfied on or before 31
December 2025 (or such later date as may be agreed by the Company and HET), no
part of the Proposals will become effective and no New Shares will be issued
pursuant to the Scheme.

Costs and expenses of the Scheme and the Proposals

Save as noted below, the Company and HET have each agreed to bear their own
costs associated with the Scheme and the Proposals. The fixed direct costs of
the Proposals payable by the Company (that is, excluding (i) Admission Fees
and Acquisition Costs and (ii) FEV Proposed Novation Costs) are estimated to
be approximately £555,0000 (including irrecoverable VAT). In the event that
implementation of the Scheme does not proceed, each party will bear its own
costs.

Fidelity has agreed to make a material contribution to the costs of the
Proposals by means of a waiver of the management fees that would otherwise be
payable, under the AIFM Agreement and the Investment Management Agreement, by
the Combined Entity in respect of the net assets transferred by HET to the
Company pursuant to the Scheme for the 12 month period immediately following
the Effective Date (the "Fidelity Cost Contribution").

The Fidelity Cost Contribution will be calculated using the fee rate
thresholds and marginal fee rates of the Revised Fee Arrangements (as set out
above).

For the purposes of the Scheme, the value of the Fidelity Cost Contribution
(as at the Calculation Date) will first be credited to the FEV FAV against any
and all FEV transaction costs (including, for the avoidance of doubt, the
Admission Fees and Acquisition Costs) and FEV Proposed Novation Costs up to a
maximum of £1.25 million (inclusive of VAT) (the "FEV Fidelity
Contribution"). Any remaining balance of the Fidelity Cost Contribution will
be credited to the Rollover Pool for the benefit of HET Shareholders rolling
over into FEV (the "HET Fidelity Contribution"). The Fidelity Cost
Contribution is expected to fully offset the Company's direct and indirect
transaction costs, such that Shareholders are not expected to suffer any NAV
dilution from the costs of the Scheme and/or Issue. The FEV Proposed Novation
Costs are also anticipated to be partially offset by the FEV Fidelity
Contribution. It is expected that the Company will bear up to £200,000 of FEV
Proposed Novation Costs (inclusive of VAT) after application of the FEV
Fidelity Contribution (which, in the context of the Company as a whole, are
not considered to be material).

Board composition

It is intended that, following completion of the Scheme, Vicky Hastings and
Rutger Koopmans (both current HET Directors) (the "Prospective Directors")
will be appointed as non-executive Directors of the Company. The Board of the
Combined Entity will therefore initially consist of seven Directors,
comprising the five current Directors of the Company and two current HET
Directors, with Davina Walter as Chairman, Paul Yates as Senior Independent
Director and Fleur Meijs as Chair of the Audit Committee. The appointment of
the Prospective Directors ensures representation on the Company's Board for
both the shareholders of HET (which was formerly Henderson European Focus
Trust plc) and the former shareholders of Henderson EuroTrust plc (which
combined with HET in 2024).

Following nine years of service, Paul Yates has advised the Company that he
intends to retire from the Board at the next annual general meeting of the
Company, which is expected to be held in May 2026, and will not stand for
re-election. Following the 2026 AGM the number of Directors is therefore
expected to reduce to six Directors.

Proposed Novation of HET Loan Notes to the Company

HET currently gears through, among other things, its privately placed: (i)
€25,000,000 1.53 per cent. unsecured Series A Senior Notes due 31 January
2047; and (ii) €10,000,000 1.66 per cent. unsecured Series B Senior Notes
due 31 January 2052 (together, the "HET Loan Notes"). 

The boards of both FEV and HET agree that there is merit in novating the HET
Loan Notes from HET to FEV so that the Combined Entity can continue to benefit
of the low-cost gearing provided by the HET Loan Notes (which have coupons at
materially lower rates than prevailing borrowing rates).

Consequently, representatives of both FEV and HET have engaged in commercial
discussions with the HET Noteholder. Following such discussions, the HET
Noteholder, HET and FEV have reached agreement in respect of a deed of
novation, amendment and restatement of the HET Note Purchase Agreement
approving, among other matters, the proposed novation of the HET Loan Notes to
the Company and substitution of the Company in place of HET in its capacity as
issuer and sole debtor of the HET Loan Notes with effect from the Effective
Date (the "Proposed Novation"). For the avoidance of doubt, other than a work
fee proposed to be paid by HET and FEV to the HET Noteholder in connection
with the Proposed Novation, there will be no repayment charge or premium
payable to the HET Noteholder as a result of the Proposed Novation.

The HET Loan Notes will be valued at par value for the purposes of the Scheme
(and, if the Proposed Novation becomes effective, when calculating the
Company's Net Asset Value thereafter). Pursuant to the Transfer Agreement, in
consideration for the assumption by the Company of the obligations under the
HET Loan Notes, HET will transfer additional HET assets (as part of the
Rollover Pool) with an aggregate value equal to the outstanding par value of
the HET Loan Notes (as at the Calculation Date) together with (i) any interest
accrued thereon up to and including the Calculation Date and (ii) an amount
equal to any further interest expected to be accrued thereon in the period
between the Calculation Date and the Effective Date (the "Proposed Novation
Value").

Pursuant to the Proposed Novation Documents, the Proposed Novation is
conditional on the provision of customary completion deliverables. In the
event that these conditions have not been satisfied as at the Calculation Date
(other than any condition relating to the Scheme becoming effective and other
ancillary conditions precedent under the Proposed Novation Documents), the
Proposed Novation will not occur. In such circumstances, HET will be
responsible for repaying the HET Loan Notes (including any interest accrued
thereon) and the Proposed Novation Value shall be deemed to be £nil for the
purposes of the Scheme. In the event that the HET Loan Notes are repaid, it is
not currently expected that there will be any early repayment charges payable
to the HET Loan Noteholder.

Admission and Dealings

Applications will be made by the Company to the FCA and to the London Stock
Exchange for the New Shares to be admitted to the closed-ended investment
funds category of the Official List and to trading on the Main Market,
respectively. If the Proposals become effective, it is expected that the New
Shares will be admitted to the Official List, and dealings on the Main Market
will commence, on 29 September 2025.

General Meeting

The Proposals are conditional, among other things, upon Shareholders' approval
of the Resolution to be proposed at the General Meeting. The General Meeting
will be held at 10.00 p.m. on 15 September 2025 at the offices of Fidelity
International, 4 Cannon Street, London EC4M 5AB. The Resolution will be
proposed as an ordinary resolution and in order to be passed will,
accordingly, require more than 50 per cent. of votes cast in person or by
proxy to be voted in favour of it.

The Resolution will, if passed, authorise the Directors to allot up to
200,000,000 New Shares pursuant to the Scheme, such number being considered
sufficient to satisfy the maximum number of New Shares that could be required
to be issued in connection with the Scheme. Notice of the General Meeting is
set out at the end of the Circular and contains the full text of the
Resolution.

The Board considers the Proposals to be in the best interests of Shareholders
as a whole and, accordingly, unanimously recommends that Shareholders vote in
favour of the Resolution to be proposed at the General Meeting, as the
Directors intend to do in respect of their own beneficial holdings.

Expected timetable

 

                                                                                                                                                                                                       
                                                                                                                                                 2025                                                  
 Publication of the Prospectus and the Circular                                                                                                  21 August                                             
                                                                                                                                                                                                       
 Latest time and date for receipt of Forms of Proxy and electronic (including via CREST) proxy appointment instructions for the General Meeting  10.00 a.m. on 11 September                            
 General Meeting                                                                                                                                 10.00 a.m. on 15 September                            
 Announcement of results of General Meeting                                                                                                      15 September                                          
 Calculation Date for the Scheme                                                                                                                 close of business on 19 September                     
 Effective Date of implementation of the Scheme                                                                                                  26 September                                          
 Announcement of respective FAVs and results of the Scheme                                                                                       26 September                                          
 Admission and dealings in New Shares commence                                                                                                   8.00 a.m. on 29 September                             
 CREST Accounts credited in respect of New Shares in uncertificated form                                                                          as soon as is reasonably practicable on 29 September  
 Certificates despatched by post in respect of New Shares in certificated form                                                                    within 14 calendar days of the Effective Date         

All references to time in this announcement are to UK time. Each of the times
and dates in the above expected timetable (other than in relation to the
General Meeting) may be extended or brought forward. If any of the above times
and/or dates change, the revised time(s) and/or date(s) will be notified to
Shareholders by an announcement through a Regulatory Information Service.

Dickson Minto Advisers LLP is acting as sponsor and financial adviser to the
Company in connection with the Proposals.

The Prospectus has been approved by the Financial Conduct Authority and the
Prospectus and Circular will shortly be available for inspection at the
National Storage Mechanism which is located
at https://data.fca.org.uk/a/nsm/nationalstoragemechanism and on the
Company's website at www.fidelity.co.uk/Europe.

 For further information please contact:                                               
 FIL Investment Services (UK) Limited                             +44 (0)800 700 000   
 Claire Dwyer Daniel Summerland Dominic Newman                                         
 Dickson Minto Advisers LLP (Sponsor & Financial Adviser to FEV)  +44 (0)20 7649 6823  
 Douglas Armstrong Andrew Clark Jamie Seedhouse                                        
                                                                                       

 

Notes

(1)        Based on the illustrative combination of the Company and HET
as at 18 August 2025 (with Net Assets of approximately £1.68 billion and
£664 million respectively), current cost estimates and assuming (i) there are
no Dissenting HET Shareholders and (ii) 33.3 per cent. of HET Shares are
validly elected for the Cash Option (such that the Cash Option is fully
subscribed)). Figures exclude, amongst other things, any impact of HET
portfolio realisation costs in connection with the Proposals. All figures are
illustrative only, using currently available information and estimates, and
are subject to change.

(2)        The Company's last published OCR (as at 31 December 2024)
was 0.76 per cent. Based on, inter alia, the assumptions set out in Note (1)
above, the illustrative OCR of the Combined Entity on completion of the
Proposals is currently expected to be 0.68 per cent. (without making any
adjustment to the calculation of the annual amount payable under the Revised
Fee Arrangements to account for the Fidelity Cost Contribution given that this
is a non-recurring item).

(3)        The Company currently pays an Annual Management Fee of 0.85
per cent. of Net Assets up to and including £400 million and 0.65 per cent.
of Net Assets in excess of £400 million.

 

IMPORTANT NOTICES

General

This announcement is an advertisement for the purposes of the Prospectus
Regulation Rules of the UK Financial Conduct Authority ("FCA") and is not a
prospectus. This announcement does not constitute or form part of, and should
not be construed as, an offer for sale or subscription of, or solicitation of
any offer to subscribe for or to acquire, any ordinary shares in the Company
in any jurisdiction, including in or into Australia, Canada, Japan, the
Republic of South Africa, the United States of America (including its
territories and possessions, any state of the United States and the District
of Columbia) or any EEA Member State.

This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America. This announcement is not
an offer of securities for sale into the United States. The securities
referred to herein have not been and will not be registered under the US
Securities Act of 1933, as amended, and may not be offered or sold in the
United States, except pursuant to an applicable exemption from
registration. No public offering of securities is being made in the United
States.

This announcement does not contain all the information set out in the
Circular. Shareholders should read the Circular in full before deciding what
action to take in respect of the Proposals.

Approval of the Prospectus by the FCA should not be understood as an
endorsement of the securities that are the subject of the Prospectus. HET
Shareholders are recommended to read the Prospectus before making a decision
in order to fully understand the potential risks associated with a decision to
invest in the Company's securities.

The Company's Legal Entity Identifier is 549300UC0QPP7Y0W8056.

Sponsor

Dickson Minto Advisers LLP, which is authorised and regulated by the FCA in
the United Kingdom, is acting as sponsor and financial adviser to the Company
only and for no one else in connection with the Issue, the Scheme and the
other arrangements referred to in this announcement. Dickson Minto Advisers
LLP will not regard any other person as its client in relation to the Issue,
the Scheme and the other arrangements referred to in this announcement and
will not be responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing any advice in relation to
the Issue, the Scheme, the contents of this announcement or any transaction or
arrangement referred to in this announcement. This does not exclude any
responsibilities that Dickson Minto Advisers LLP may have under FSMA or the
regulatory regime established thereunder.

Apart from the responsibilities and liabilities, if any, that may be imposed
upon Dickson Minto Advisers LLP by the Financial Services and Markets Act 2000
or the regulatory regime established thereunder, neither Dickson Minto
Advisers LLP nor any persons associated or affiliated with it accepts any
responsibility whatsoever or makes any representation or warranty, express or
implied, concerning the contents of this announcement, including its accuracy,
completeness or verification, or concerning any other statement made or
purported to be made by it or them, or on its or their behalf, the Company or
the Directors in connection with the Company or the Proposals, and nothing in
this announcement is, or shall be relied upon as, a promise or representation
in this respect, whether as to the past or future. Dickson Minto Advisers LLP
and its respective associates and affiliates accordingly disclaim, to the
fullest extent permitted by law, all and any responsibility and liability
whether arising in tort, contract or otherwise (save as referred to herein)
that it or they might otherwise have in respect of this announcement or any
such statement.

 

 



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