REG - Henderson Eurotrust - Merger Update

Henderson EurotrustAnnouncement

14/05/2024 18:30

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RNS Number : 4375O  Henderson Eurotrust PLC  14 May 2024

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN
OR INTO, THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND
POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF
COLUMBIA), AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH
AFRICA, IN ANY MEMBER STATE OF THE EEA OR IN 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.

This announcement contains information that is inside information for the
purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as
amended (the "Market Abuse Regulation"). The person responsible for arranging
for the release of this announcement on behalf of HNE is Janus Henderson
Secretarial Services UK Limited acting as corporate secretary.

 

14 May 2024

 

 

Henderson EuroTrust plc (the "Company" or "HNE")

 

Merger Update

 

Introduction

The board of HNE (the "Board") announced on 14 March 2024 that the Company had
signed Heads of Terms in respect of a proposed merger of interests with
Henderson European Focus Trust plc ("HEFT") to form Henderson European Trust
plc (the "Combined Trust") - an enlarged, flagship European investment trust
to be managed by the European equities team at Janus Henderson Investors
("Janus Henderson" or the "Manager") (the "Proposals").

Shareholders representing 37.6% and 35.4% of the respective issued share
capital of HNE and HEFT indicated their intention to vote in favour of the
Proposals, and following this announcement the Board has been pleased to
receive further positive feedback and indications of support regarding the
Proposals from shareholders in the Company ("HNE Shareholders").

 

Subsequent developments

The Board has recently received an unsolicited non-binding proposal from a
third party in respect of a potential alternative combination with HNE.

In pursuit of the best outcome for HNE Shareholders, the Board engaged with
the unsolicited approach, considered other potential options, and re-engaged
with HEFT and the Manager regarding the Proposals.

After extensive consideration of the potential options for HNE, negotiations
seeking to optimise the outcome for HNE Shareholders, and a consultation with
certain major HNE Shareholders who were unanimously supportive, the Board
announces that HNE and HEFT have agreed and are recommending revised terms in
respect of the proposed merger of interests with HEFT (the "Updated
Proposals") which involve the following amendments to the Proposals:

·      Increased cash option: Under the Proposals, HNE Shareholders were
entitled to elect to receive cash in respect of part or all of their
shareholding, subject to an aggregate limit of 5% of HNE's issued share
capital. HEFT was also putting forward a tender offer to HEFT shareholders for
up to 5% of HEFT's issued share capital, which broadly reflected the cash exit
being provided for HNE Shareholders. Under the Updated Proposals, this limit
on the cash exit has been increased to 15% of each company's issued share
capital.

 

·      Enhanced contribution from Janus Henderson to the costs of the
Proposals: Janus Henderson had committed to make a contribution to the costs
of the Proposals, with a view to ensuring the Proposals are cost-neutral for
continuing shareholders in the Combined Trust. The Manager has reiterated its
commitment to the merger by undertaking that it will make a contribution of
£1.55m to the combined costs under the Updated Proposals which will ensure
that, net of the application of the 2% discount to the HNE cash exit and the
HEFT tender offer, the Updated Proposals are cost-neutral for continuing
shareholders in the Combined Trust, with any surplus being available for the
benefit of ongoing shareholders in the Combined Trust.

 

·      Reduced management fees for the Combined Trust: Under the terms
of the Updated Proposals the Combined Trust will benefit from a further
improvement in management fee terms, with an additional reduction on the
second fee tier from 50 bps p.a. to 47.5 bps p.a. The management fees will be
charged on the following basis:

 

§ 60 bps p.a. on net assets up to, but excluding, £500 million;

§ 47.5 bps p.a. on net assets equal to and in excess of  £500 million and
up to, but excluding, £1 billion; and

§ 45 bps p.a. on net assets equal to and in excess of £1 billion.

 

·    Additional discount control mechanism: In addition to the previous
commitment of a 5-yearly performance-related tender offer under the Proposals,
the board of the Combined Trust will consider, at its discretion, subject to
normal market conditions and no earlier than after an initial three year
period, whether it would be in the long term interests of shareholders as a
whole to be offered additional opportunities to realise some of their
investment in the Combined Trust. The board of the Combined Trust's
consideration will, alongside other factors, recognise the importance to
shareholders that the Combined Trust's shares should not persistently trade at
a significant discount to NAV in absolute terms or relative to the Combined
Trust's peer group.

 

Expected timetable

In connection with the Updated Proposals, documentation is still expected to
be sent to each company's shareholders by the end of May 2024 with a view to
convening general meetings in June and July 2024. The Updated Proposals are
anticipated to conclude in early July 2024.

 

For further information please contact:

 

 Henderson EuroTrust plc

 Nicola Ralston                      Contact via Company Secretary

 Chairman                            020 7818 4082

 Janus Henderson Investors, Manager

 Dan Howe                            020 7818 4458

 Head of Investment Trusts

 Oliver Packard                      0207 818 2690

 Head of Investment Trust Sales

 Harriet Hall                        020 7818 2919

 PR Director, Investment Trusts

 Deutsche Numis, Corporate Broker

 Nathan Brown                        020 7260 1426

 Matt Goss                           020 7260 1642

 

Notes

 

Legal Entity Identifier:

HNE:  213800DAFFNXRBWOEF12

 

Disclaimers

 

The information in this announcement is for background purposes only and does
not purport to be full or complete. No reliance may be placed for any purpose
on the information contained in this announcement or its accuracy or
completeness. The material contained in this announcement is given as at the
date of its publication (unless otherwise marked) and is subject to updating,
revision and amendment. In particular, any proposals referred to herein are
subject to revision and amendment.

 

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. Any securities that
may be issued in connection with the matters referred to herein have not been
and will not be registered under the U.S. Securities Act of 1933, as amended
(the "Securities Act") and may not be offered or sold in the United States,
except pursuant to an applicable exemption from registration under the
Securities Act and in compliance with the securities laws of any state, county
or any other jurisdiction of the United States. No public offering of
securities is being made in the United States.

 

Furthermore, any securities that may be issued in connection with the matters
referred to herein may not be offered or sold indirectly or indirectly in,
into or within the United States or to or for the account or benefit
of U.S. Persons except under circumstances that would not result in the
Company being in violation of the U.S. Investment Company Act of 1940, as
amended.

 

Outside the United States, the securities may be sold to persons who are
not U.S. Persons pursuant to Regulation S.

 

Moreover, any securities that may be issued in connection with the matters
referred to herein have not been, nor will they be, registered under the
applicable securities laws of Australia, Canada, Japan, New Zealand, the
Republic of South Africa, or any member state of the EEA (other than any
member state of the EEA where the shares are lawfully marketed).

 

The value of shares and the income from them is not guaranteed and can fall as
well as rise due to stock market and currency movements.  When you sell your
investment you may get back less than you originally invested. Figures refer
to past performance and past performance should not be considered a reliable
indicator of future results. Returns may increase or decrease as a result of
currency fluctuations.

 

This announcement may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends", "may", "might",
"will" or "should" or, in each case, their negative or other variations or
similar expressions. All statements other than statements of historical facts
included in this announcement, including, without limitation, those regarding
the Company's financial position, strategy, plans, proposed acquisitions and
objectives, are forward-looking statements.

 

Forward-looking statements are subject to risks and uncertainties and,
accordingly, the Company's actual future financial results and operational
performance may differ materially from the results and performance expressed
in, or implied by, the statements. These forward-looking statements speak only
as at the date of this announcement and cannot be relied upon as a guide to
future performance. Subject to their respective legal and regulatory
obligations, each of HNE and Janus Henderson expressly disclaims any
obligations or undertaking to update or revise any forward-looking statements
contained herein to reflect any change in expectations with regard thereto or
any change in events, conditions or circumstances on which any such statement
is based unless required to do so by law or any appropriate regulatory
authority, including FSMA, the Listing Rules, the Prospectus Regulation Rules,
the Disclosure Guidance and Transparency Rules, the Prospectus Regulation and
MAR.

 

None of HNE or Janus Henderson, or any of their respective affiliates, accepts
any responsibility or liability whatsoever for, or makes any representation or
warranty, express or implied, as to this announcement, including the truth,
accuracy or completeness of the information in this announcement (or whether
any information has been omitted from the announcement) or any other
information relating to them, whether written, oral or in a visual or
electronic form, and howsoever transmitted or made available or for any loss
howsoever arising from any use of the announcement or its contents or
otherwise arising in connection therewith. Each of HNE and Janus Henderson,
and their respective affiliates, accordingly disclaim all and any liability
whether arising in tort, contract or otherwise which they might otherwise have
in respect of this announcement or its contents or otherwise arising in
connection therewith.

 

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