REG - Henderson Euro Trust - Publication of circular

Henderson European TrustAnnouncement

21/08/2025 14:00

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RNS Number : 3080W  Henderson European Trust Plc  21 August 2025

Henderson European Trust plc

Janus Henderson Fund Management UK Limited

Legal entity identifier: 213800GS89AL1DK3IN50

21 August 2025

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY (IN WHOLE
OR IN PART) IN, INTO OR FROM ANY JURISDICITON WHERE TO DO SO WOULD COSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THE JURISDICITON.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATON FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. ON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

HENDERSON EUROPEAN TRUST PLC

(the "Company")

Publication of a Circular in connection with the recommended proposals for the
voluntary winding-up of the Company and combination with Fidelity European
Trust PLC ("FEV")

·   The Board of the Company announces the publication of a shareholder
circular (the "Circular") setting out the proposals for the voluntary
winding-up of the Company and combination with FEV.

·   The Board is confident that the combination with FEV, creating a
market-leading European investment product, provides a compelling, long-term
option for Shareholders.

·    The HET Board unanimously recommends Shareholders to vote in favour
of the Resolutions to be proposed at the General Meetings which will be held
on 9 and 26 September 2025.

·     The Company's circular will be available at
www.hendersoneuropeantrust.com (http://www.hendersoneuropeantrust.com) .

Vicky Hastings, Chair of HET, commented:

"We are confident that the combination with Fidelity European Trust is highly
compelling for Shareholders. Expected benefits of the Board's recommendation
include unparallelled scale and enhanced liquidity, a 'best-in-class'
investment team which will provide continuity of investment style, and one of
the narrowest discounts to net asset value in the sector, alongside the choice
of a 33.3% Cash Option exit at a 1.75% discount to the residual Formula Asset
Value.

The Board conducted a thorough and comprehensive review of options for the
company after the resignation of both co-portfolio managers from Janus
Henderson Investors in January 2025. The Board's decision to unanimously
recommend a combination with Fidelity European Trust is a strategic one which
considered the fast-evolving environment for investment companies."

Introduction

The Board of Henderson European Trust plc (the "Company" or "HET") announces
that it has today published a shareholder circular (the "Circular") setting
out proposals for the recommended winding-up of the Company and combination
with Fidelity European Trust PLC ("FEV") (the "Transaction"). Defined terms
used in this announcement shall, unless the context requires otherwise, have
the meanings given to them in the Circular.

The Board announced on 19 June 2025 that it had agreed heads of terms with FEV
for a combination of the assets of the Company with FEV (the "Combined
Entity"), to be effected by way of a scheme of reconstruction and members'
voluntary winding-up of the Company under section 110 of the Insolvency Act
1986 (the "Scheme").

Shareholders will be entitled, pursuant to the Scheme, to elect to receive in
respect of some or all of their Shares:

(a)          New FEV Shares (the "Rollover Option"); and/or

(b)          cash (the "Cash Option").

Eligible Shareholders that make no Election (or no valid Election) will be
deemed to have elected for New FEV Shares in respect of their entire holding
of Shares.

The maximum number of Shares that can be elected (or deemed to have been
elected) for the Cash Option is limited to 33.3 per cent. of the total number
of Shares in issue (excluding Shares held in treasury) as at the Calculation
Date (the "Maximum Cash Option Shares"). The Cash Option will be offered at a
discount of 1.75 per cent. to the Residual Formula Asset Value attributable to
those Shares in respect of which valid Elections or deemed Elections have been
made for the Cash Option (following any required scaling back in accordance
with the Scheme) (the "Cash Option Discount").

The choice between the options available under the Proposals will be a matter
for each Shareholder to decide and will be influenced by their investment
objectives and by their personal, financial and tax circumstances.
Accordingly, Shareholders should, before making any Election, read carefully
all the information in the Circular and in the FEV Prospectus. The FEV
Prospectus should be read alongside, but does not form part of, the HET
Circular.

The purpose of the Circular is to explain the Proposals and their rationale,
and expected benefits, the actions required to be taken by Shareholders in
order for them to be implemented and to convene the General Meetings to seek
the required Shareholder approvals.

Details of the Resolutions to be proposed at the General Meetings are set out
in the Notices of General Meetings contained within the Circular.

The expected timetable associated with the Transaction is provided at the end
of this announcement.

Background to and rationale for the Proposals

As announced on 19 June 2025, following a comprehensive review of the
potential options available for the Company's future following the resignation
of both co-portfolio managers from Janus Henderson Investors on 31 January
2025, the Company agreed heads of terms with FEV in respect of the proposed
combination of the two companies.

Given the material impact to the Company of the co-portfolio managers'
resignations, the Board, via its broker and financial adviser, Deutsche Numis,
solicited views from a significant proportion of the Company's Shareholders
which clearly called for a thorough review of the options available to the
Company. To aid the Board with this review, the Board appointed brokers
Deutsche Numis and investment consultant WTW to manage a formal process to
find the best outcome for Shareholders. Proposals were evaluated based on
factors such as investment philosophy, alignment with the existing mandate,
fund manager resources, strategic positioning, and scale advantages.

The Board's decision was ultimately strategic in nature and considered the
fast-evolving environment for investment companies. As a consequence of
conducting a thorough and comprehensive review process, the Board is confident
that the combination with FEV provides a highly compelling, and optimal
long-term option for Shareholders.

The Combined Entity will be managed by Fidelity's award-winning co-portfolio
managers, Sam Morse and Marcel Stötzel, whose systematic approach to managing
investments benefits from the support and resources of the FEV Manager's
extensive equity research platform. Both the Company and FEV have aimed to
deliver long-term growth in capital and income through investment in a
portfolio of high-quality, predominately large-cap European equities.
Furthermore, the Proposals would provide continuity of investment style for
rolling Shareholders.

Benefits of the Proposals

The Directors believe that the Proposals will have the following benefits for
Shareholders:

·    access to a market-leading European investment product: as the
flagship UK closed-ended vehicle for investment in Europe, the Combined Entity
is expected to benefit from an enhanced profile and marketability;

·    unparalleled scale: the Combined Entity is expected to have net
assets in excess of £2.1 billion, further enhancing FEV's position as the
largest European-focused investment trust. Shareholders are expected to
benefit from economies of scale through improved economics, enhanced resources
available to promote the Combined Entity to new as well as existing investors
and through increased secondary market trading liquidity;

·   experienced and award-winning portfolio managers with strong long-term
investment performance: the Combined Entity will be managed by Fidelity's
award-winning co-portfolio managers, Sam Morse and Marcel Stötzel, whose
systematic approach to managing investments benefits from the support and
resources of the FEV Manager's extensive equity research platform (132 global
equity research analysts, 34 of which cover Europe directly). FEV has provided
annualised NAV total returns of 10.8 per cent. over the 10 years to 18 August
2025;

·    continuity of investment style and approach: both the Company and FEV
have aimed to deliver long-term growth in both capital and income through
investment in a portfolio of high-quality, predominantly large-cap, European
equities. Furthermore, FEV's investment style would provide continuity for
Shareholders in that its portfolio managers focus on finding attractively
valued companies, with good prospects for cash generation and dividend growth
over the longer term, with positioning driven by opportunities at the
individual stock level rather than macro developments;

·    strong discount record: as at close of business on 18 August 2025,
FEV traded on the narrowest discount in the AIC Europe Sector at 2.5 per cent.
and had the narrowest 1-year average discount at 5.7 per cent.  Alongside the
attractive long-term prospects for the Combined Entity, the Combined Entity's
liquidity, and narrow discount, should also provide Shareholders with greater
opportunities to realise their investment through the market should they wish
to do so. Furthermore, FEV will introduce an enhanced discount management
policy, such that the Combined Entity will seek to maintain any discount to
net asset value in mid-single digits through buybacks in normal market
conditions;

·    significant contribution to costs from Fidelity: Fidelity has
undertaken 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 that roll over from HET (with an expected
value of c. £2.4 million based on current transaction assumptions and full
take-up of the Cash Option). This contribution would first be applied to meet
FEV's transaction costs in implementing the Proposals and the FEV Proposed
Novation Costs (capped at £1.25 million including VAT), with the balance,
which is expected to cover substantially all of the direct costs of the
Proposals to be borne by HET Shareholders receiving the Rollover Option,)
being credited to the Rollover Pool FAV; and

·    material Cash Option available: Shareholders will have the option to
elect for the Cash Option as part of the Proposals which is capped at 33.3 per
cent. of the issued share capital of the Company (excluding treasury shares).
This sizeable Cash Option allows Shareholders a choice between continuing
their investment in a well-regarded investment trust in the European equities
sector or receiving cash in respect of their investment at a 1.75 per cent.
discount to the Residual Formula Asset Value.

Summary information on FEV and the Combined Entity

FEV is a closed-ended investment company incorporated on 16 August 1991 in
England and Wales with registered number 02638812 and registered as an
investment company under section 833 of the Act. FEV carries on business as an
investment trust within the meaning of Chapter 4 of Part 24 of the Corporation
Tax Act 2010.

Following implementation of the Proposals, the Combined Entity will be managed
in accordance with FEV's existing investment objective and policy by the FEV
Manager, with Sam Morse and Marcel Stötzel, continuing as FEV's portfolio
managers.

In connection with the Proposals, the FEV Board has agreed to enhance its
discount management policy such that FEV will seek to maintain any discount to
NAV in mid-single digits in normal market conditions by undertaking share
buybacks where considered appropriate by the FEV Board.

It is proposed that Vicky Hastings and Rutger Koopmans (the "Prospective
Directors") will join the FEV Board upon the Scheme becoming effective. The
Board of the Combined Entity will therefore comprise seven directors made up
of the five existing FEV Directors and the Prospective Directors. The
appointment of the Prospective Directors ensures representation on FEV's Board
for Shareholders (which includes the former shareholders of Henderson
EuroTrust plc, which combined with the Company in 2024).

Further information on FEV can be found in Part 5 of the published Circular.

Any investment in FEV will be governed by the FEV Prospectus which is
available at www.fidelity.co.uk/Europe. Accordingly, Shareholders are required
to read the FEV Prospectus and in particular the risk factors contained
therein. Neither the Board (other than the Prospective Directors, in each case
in their capacity as a prospective director of FEV) nor the Company takes any
responsibility for the contents of the FEV Prospectus.

Debt

The Company 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 HET and FEV agreed that there were significant advantages
to the novation of the HET Loan Notes from HET to FEV so that the Combined
Entity could continue to have the benefit of the HET Loan Notes' coupon levels
which are substantially below prevailing borrowing rates. The Board is pleased
to report that agreement has been reached, and the HET Loan Notes are expected
to be novated to FEV in accordance with the Proposed Novation Documents.

For the avoidance of doubt, the Proposed Novation is not a condition of the
Scheme (such that the Scheme can still proceed even if the Proposed Novation
does not). However, neither the Proposed Novation nor the repayment of the HET
Loan Notes will proceed if the Scheme does not become effective.

Further details of the Proposed Novation can be found in Part 1 of the
published Circular.

Conditions on the Proposals

Implementation of the Proposals is subject to a number of conditions,
including:

·     the passing of the Resolutions at the General Meetings, or any
adjournments of those meetings, and such Resolutions becoming unconditional in
all respects;

·    the passing of the FEV Allotment Resolution at the FEV General
Meeting, or any adjournment thereof, and the FEV Allotment Resolution becoming
unconditional in all respects;

·     the approval of the Financial Conduct Authority to amend the listing
of the Shares to reflect their reclassification as shares with "A" rights (in
respect of which the holders are deemed to have elected for the Rollover
Option) and shares with "B" rights (in respect of which the holders have
validly elected, or have been deemed to have elected, for the Cash Option) for
the purposes of implementing the Scheme;

·     the Financial Conduct Authority and the London Stock Exchange having
acknowledged to FEV or its agents (and such acknowledgement not having been
withdrawn) the applications for the Admission of the New FEV Shares to the
closed-ended investment funds category of the Official List and to trading on
the Main Market, subject only to allotment; and

·       the Directors and the FEV Directors resolving to proceed with
the Scheme.

Shareholders' Entitlements under the Scheme

Pursuant to the terms of the Scheme, each Shareholder on the Register on the
Record Date may elect, or may be deemed to have elected, to receive:

·     such number of New FEV Shares on the basis of the ratio of the
Rollover Pool FAV per Share to the FEV FAV per FEV Share multiplied by the
number of Reclassified Shares with "A" rights held by them; and/or

·     an amount of cash equal to the realisation value of the Cash Pool
divided by the total number of Reclassified Shares with "B" rights and
multiplied by the number of Reclassified Shares with "B" rights held by them.

Eligible Shareholders that make no election will be deemed to have elected for
New FEV Shares. The maximum number of Shares that can be elected for the Cash
Option is limited to 33.3 per cent. of the total number of Shares in issue
(excluding Shares held in treasury). Excess Applications will be scaled back.

Illustrative Entitlements

For illustrative purposes only, had the Calculation Date been close of
business on the Latest Practicable Date and assuming: (i) no Shareholders
validly exercise their right to dissent from participation in the Scheme; (ii)
the maximum number of Shares is elected for the Cash Option; and (iii) the HET
Pre-Liquidation Interim Dividend (of 3.4 pence per Share) and the anticipated
FEV Interim Dividend (expected to be not less than 3.6 pence per FEV Share)
have both been paid:

·    the Rollover Pool FAV Per Share would have been 212.130202 pence; and

·    the Cash Pool FAV per Share would have been 206.118032 pence.*

in each case receivable in addition to the HET Pre-Liquidation Interim
Dividend of 3.4 pence per HET Share.

The Rollover Pool FAV per Share and the Cash Pool FAV per Share may be
compared with the Share price and cum-income NAV per Share as at the Latest
Practicable Date which were 207.0 pence and 214.9 pence, respectively.

For illustrative purposes only, had the Calculation Date been close of
business on the Latest Practicable Date and on the basis of the assumptions
set out above, the FEV FAV per FEV Share would have been 412.0 pence, which
may be compared with the FEV Share price and cum-income NAV per FEV Share as
at the Latest Practicable Date which were 403.0 pence and 415.5 pence,
respectively.

On the basis of the above, the Rollover Option would have produced a
conversion ratio of 0.514901 and, in aggregate, 106,159,798 New FEV Shares
would have been issued to Shareholders who elected for the Rollover Option
under the Scheme.

* The illustrative Rollover Pool FAV per Share and the illustrative Cash Pool
FAV per Share have been adjusted to reflect the deduction of assets
representing withholding tax expected to be recoverable by the Company,
estimated at approximately £3.9 million as at 18 August 2025.

The above figures are for illustrative purposes only and do not represent
forecasts. The Rollover Pool FAV per Share, the FEV FAV per Share and the Cash
Pool FAV per Share may materially change up to the Effective Date as a result
of, inter alia, changes in the value of investments.

Costs

Each of the Company and FEV will bear their own costs in relation to the
Proposals. It is expected that the HET Fidelity Contribution will
substantially offset the portion of the Company's direct transaction costs
which would otherwise be borne by Shareholders receiving the Rollover Option.

The Company's transaction costs are not expected to exceed £1.3 million. The
estimate of the Company's transaction costs includes the HET Proposed Novation
Costs (being the portion of the Proposed Novation Costs to be borne by HET).
The anticipated costs of realigning and/or realising the Company's portfolio
to ensure it is suitable for transfer to FEV and the Liquidators' Retention to
cover unknown liabilities (estimated at £100,000) are excluded.

In addition, in the event that the HET Loan Notes are not novated to FEV, but
the Scheme becomes effective, the HET Loan Notes will be repaid. In such
event, the Company is not expected to incur any additional costs but shall
bear certain professional and legal fees incurred in connection with the
commercial discussions relating to the Proposed Novation (which are included
in the above estimate).

Fidelity has undertaken to make a material contribution to the costs of the
Proposals by means of a waiver of the management fees which would otherwise be
payable (pursuant to the FEV Management Agreements) by the Combined Entity in
respect of the net assets to be transferred from HET to FEV pursuant to the
Proposals 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 detailed in Part 5 of the Circular). 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 (which includes the Admission Fees and Acquisition Costs)
and the FEV Proposed Novation Costs up to a maximum of £1.25 million
(inclusive of VAT) (the "FEV Fidelity Contribution"). It is anticipated that
the maximum amount of the FEV Fidelity Contribution available to FEV will be
used to pay substantially all of its transaction costs and partially cover the
FEV Proposed Novation Costs. The remaining balance of the Fidelity Cost
Contribution will be credited to the Rollover Pool for the benefit of
Shareholders receiving the Rollover Option (the "HET Fidelity Contribution").

Dividends

The Board has today announced a pre-liquidation interim dividend of 3.4 pence
per Share in respect of the financial period anticipated to end on 25
September 2025 which, subject to the Resolutions to be proposed at the First
General Meeting being passed and the FEV Allotment Resolution to be proposed
at the FEV General Meeting being passed, will be paid to Shareholders on the
Register as at 5 September 2025 (the "HET Pre-Liquidation Interim Dividend").
The Shares are expected to go ex-dividend on 4 September 2025. The expected
payment date for the HET Pre-Liquidation Interim Dividend is 19 September
2025.

General meetings

The implementation of the Proposals will require two general meetings of the
Company. The First General Meeting (to be held at 10.00 a.m. on 9 September
2025) and the Second General Meeting (to be held at 9.00 a.m. on 26 September
2025) will be held at the offices of Deutsche Numis, 45 Gresham Street,
London, EC2V 7BF.

Notices of the General Meetings, and the Resolutions to be proposed at the
meetings, are set out at the end of the Circular.

Recommendation

The Board, which has been advised by Deutsche Numis, considers the Proposals
and the Resolutions to be proposed at the General Meetings to be in the best
interests of Shareholders as a whole. In providing its advice, Deutsche Numis
has taken into account the commercial assessment of the Board.

Accordingly, the Board unanimously recommends Shareholders to vote in favour
of the Resolutions, as the Directors intend to do in respect of their own
beneficial holdings of Shares, which total 139,366 Shares (representing 0.05
per cent. of the Company's total voting rights) as at the Latest Practicable
Date. None of the Directors intends to elect for the Cash Option in respect of
any of their Shares.

Shareholders who are in any doubt as to the contents of the Circular or as to
the action to be taken should seek their own personal financial advice from an
appropriately qualified independent financial adviser.

Expected timetable

                                                                                 2025
 Ex dividend date for the HET Pre-Liquidation Interim Dividend                   4 September
 Record date for the HET Pre-Liquidation Interim Dividend                        5 September
 Latest time and date for receipt of proxy appointments in respect of the First  10.00 a.m. on 5 September
 General Meeting
 First General Meeting                                                           10.00 a.m. on 9 September
 Latest time and date for receipt of Forms of Election and TTE Instructions      1.00 p.m. on 9 September
 regarding Elections for the Cash Option
 Record date for entitlements under the Scheme                                   6.00 p.m. on 9 September
 Shares disabled in CREST for settlement                                         6.00 p.m. on 9 September
 Trading in Shares suspended                                                     7.30 a.m. on 10 September
 FEV General Meeting                                                             10.00 a.m. on 15 September
 HET Pre-Liquidation Interim Dividend paid to Shareholders                       19 September
 Calculation Date                                                                close of business on 19 September
 Latest time and date for receipt of proxy appointments in respect of the        9.00 a.m. on 24 September
 Second General Meeting
 Reclassification of the Shares                                                  8.00 a.m. on 25 September
 Suspension of listing of Reclassified Shares                                    7.30 a.m. on 26 September
 Second General Meeting                                                          9.00 a.m. on 26 September
 Effective Date for implementation of the Scheme                                 26 September
 Announcement of the results of Elections, the Rollover Pool FAV per Share, the  26 September
 Cash Pool FAV per Share and the FEV FAV per FEV Share
 CREST accounts credited with, and dealings commence in, New FEV Shares          8.00 a.m. on 29 September
 Cheques and electronic payments despatched to Shareholders who elect or are     week commencing 29 September
 deemed to elect for the Cash Option and CREST accounts credited with cash
 Certificates despatched in respect of New FEV Shares                            within 14 calendar days of the Effective Date
 Cancellation of listing of Reclassified Shares                                  as soon as practicable after the Effective Date

 

The Circular has been submitted to the National Storage Mechanism and will
shortly be available for inspection at the Company's registered office at 201
Bishopsgate, London EC2M 3AE and on the Company's website at
www.hendersoneuropeantrust.com (http://www.hendersoneuropeantrust.com) . The
FEV Prospectus will also shortly be available on Fidelity's website at
www.fidelity.co.uk/Europe.

For further information, please contact:

 Vicky Hastings                                          Greenbrook, PR Adviser

 Chair of the Board                                      Alan Tovey

 Henderson European Trust Plc                            Teresa Berezowski

 Via Deutsche Numis                                      Tel: 020 7952 2000

                                                         E: HendersonEuropeanTrust@greenbrookadvisory.com
 Deutsche Numis, Financial Adviser and Corporate Broker
 Nathan Brown
 Telephone: 020 7547 0569
 E: nathan.brown@db.com
 Matt Goss

 Tel: 020 7260 1642
 E: matt.goss@db.com

 

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