REG - Henderson Opport Tst - Publication of Scheme Circular

Henderson Opportunities TrustAnnouncement

03/02/2025 07:15

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RNS Number : 6238V  Henderson Opportunities Trust PLC  03 February 2025

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

 

3 February 2025

Henderson Opportunities Trust plc

Legal Entity Identifier: 2138005D884NPGHFQS77

 

Publication of Circular in connection with the Recommended Proposals for the
Reconstruction and Voluntary Winding-up of the Company

Introduction

 

The Board of Henderson Opportunities Trust plc (the "Company" or "HOT")
announced on 18 December 2024 that, in light of the Company's performance and
forthcoming continuation vote, it had instructed advisers to commence work on
putting forward a scheme of reconstruction to give all Shareholders a choice
between ongoing alternative investment and/or a full cash exit at NAV.

 

The Board is today putting forward proposals to Shareholders for the
winding-up of the Company by way of a scheme of reconstruction pursuant to
Section 110 of the Insolvency Act 1986 (the "Scheme"). Under the terms of the
Scheme, Shareholders will be offered the opportunity to roll over their
investment at Residual NAV into Janus Henderson UK Equity Income & Growth
Fund (the "OEIC Sub-Fund"), a sub-fund of Janus Henderson UK & Europe
Funds (the "OEIC") whose portfolio is also managed by Janus Henderson
Investors UK Limited (the "Investment Manager"), or to receive cash in respect
of their investment in the Company, or a combination of both (the
"Proposals").

 

As part of its campaign, Saba has publicly stated its aim to deliver
substantial liquidity options for shareholders. The Scheme is designed to
deliver full liquidity for Shareholders. However, given Saba's current
interest in 29.10 per cent of the Company's issued share capital (excluding
treasury shares and as notified to the Company as at close of business on the
Latest Practicable Date) Saba will be able to block the Scheme by voting
against the Scheme Resolutions should it decide to do so.

In the event that the Scheme Resolutions are not passed and the Scheme does
not become effective, the Board will need to consider alternative proposals
for the future of the Company that are in the best interests of Shareholders
as a whole.

 

Under the Proposals, which are conditional upon, amongst other things, the
passing of all of the Scheme Resolutions at the Scheme General Meetings,
Shareholders (other than Restricted Shareholders) will be able to elect (in
whole or in part and in accordance with their personal investment
requirements) to:

·              roll over their investment at Residual NAV into
Janus Henderson Equity Income & Growth Fund, a sub-fund of Janus Henderson
UK & Europe Funds and to receive either I Class OEIC Shares (which are
available to corporate investors, e.g. companies, corporate nominees,
custodian banks, fund supermarkets and fund platforms) or to receive E Class
OEIC Shares (which are available to individual investors who hold their shares
directly and where no bundled commission payments for financial advice are
made) (the "Rollover Options"); and/or

·              receive their entitlement upon the winding-up of
the Company in cash (the "Cash Option").

 

Shareholders (other than Restricted Shareholders) that make no Election (or no
valid Election) will be deemed to have elected for the relevant class of OEIC
Shares.

 

The Board announces that the Company has today published a circular (the
"Circular") to provide Shareholders with further details of the Proposals and
to convene two scheme general meetings of the Company (the "Scheme General
Meetings") to seek approval from Shareholders for the implementation of the
Proposals.

 

Background to the Proposals

 

At the Company's annual general meeting in March 2023, although Shareholders
voted in favour of the triennial resolution for the continuation of the
Company, 24.2 per cent. of the votes cast were voted against. In response to
Shareholder feedback around the Company's size, its longer-term NAV and share
price performance, the discount at which the Ordinary Shares traded and the
limited share liquidity, the Board took various steps with a view to creating
additional demand for the Ordinary Shares and enhancing value for
Shareholders. These included removing the performance fee, effecting a share
split, reducing gearing and increasing the focus on marketing. Working with
the fund managers, the Board also undertook a detailed review of the portfolio
scrutinising risk, volatility and allocation. This resulted in a reduction in
gearing and in the Company's exposure to AIM stocks.

Following the last continuation vote, the Board also started exploring
strategic options for the future of the Company. These included a possible
combination with another investment trust or a change of mandate. In November
2024, the Board concluded that, although in the most recent financial year
ended 31 October 2024 the Company had seen some recovery and had modestly
outperformed its benchmark, in the Board's view and taking into account the
various challenges the Company continued to face, Shareholders' interests
would be best served through pursuit of a strategic option. Having assessed
all available choices, the Board then determined that proposing a scheme of
reconstruction - offering a full cash exit at NAV and/or the opportunity to
roll into an open-ended fund - was the best achievable option.

Benefits of the Proposals

 

The Board believes that the Proposals should have the following benefits for
all Shareholders:

·      Opportunity for a full unrestricted cash exit: An unlimited cash
exit option will give Shareholders the option to realise all or part of their
holding

·      Ability to stay invested in a tax efficient manner: Shareholders
who may be subject to UK capital gains tax or corporation tax on chargeable
gains should generally be able to roll over their investment at Residual NAV
into the OEIC Sub-Fund and thereby continue to receive investment returns
without triggering an immediate liability to UK capital gains tax or
corporation tax on chargeable gains; and

·      Less cost implications: Shareholders electing for the applicable
Rollover Option will not suffer the full dealing costs that would be incurred
on the realisation of the Company's entire portfolio in the event of a simple
winding-up.

The Proposals

Under the Proposals, the Company will be wound up on the Winding-up Date by
means of a members' voluntary liquidation pursuant to a scheme of
reconstruction under Section 110 of the Insolvency Act 1986 and Shareholders
may elect to receive OEIC Shares in the OEIC Sub-Fund (being Janus Henderson
UK Equity Income & Growth Fund) and/or cash in respect of all or part of
their holding of Ordinary Shares in the Company. Shareholders who elect to
roll over their investment at Residual NAV into the OEIC Sub-Fund will receive
the relevant class of OEIC Shares and, in consideration of such issue, the
Company will transfer a portion of its net assets to the OEIC (for the benefit
of the OEIC Sub-Fund). In this way, it is envisaged that it should be possible
for most UK resident Shareholders who hold their Ordinary Shares as an
investment to be given a tax-efficient rollover of their entitlements.

The OEIC Shares will be issued at the prevailing net asset value per I Class
OEIC Share or E Class OEIC Share (as applicable) as at 12.00 noon on the
Effective Date multiplied by the applicable Dilution Adjustment.

Shareholders who elect for the Cash Option will be sent a cheque in respect of
their entitlement if they hold Ordinary Shares in certificated form or receive
payment through CREST in respect of their entitlement if they hold Ordinary
Shares in uncertificated form.

The Rollover Options

A Shareholder who elects to roll over all or part of their investment into the
OEIC Sub-Fund will be entitled to receive such number of either I Class OEIC
Shares or E Class OEIC Shares as is produced by dividing the proportion of the
value of either the I Class Rollover Pool or the E Class Rollover Pool (as
applicable) to which he/she/it is entitled by the applicable OEIC Share
Subscription Price (further details are set out in Part 2 of the Circular, in
particular, in paragraph 10.3 therein). The appropriation of the Company's
assets to the I Class Rollover Pool and the E Class Rollover Pool will occur
on the Calculation Date and will be based on the Residual Net Asset Value per
Share multiplied by the aggregate number of Ordinary Shares in respect of
which Shareholders have elected (or deemed to have elected) for the relevant
Rollover Option. As the appropriation of the Company's assets to the OEIC
Rollover Pools will occur on the Calculation Date, the value of Shareholders'
entitlements may be adversely affected by movements in the value of the assets
contained in the OEIC Rollover Pools between the Calculation Date and the
Effective Date.

The Cash Option

A Shareholder who elects for the Cash Option will be entitled to receive the
net realisation proceeds of such portion of the Cash Pool to which he/she/it
is entitled. The appropriation of the Company's assets to the Cash Pool will
occur on the Calculation Date and will be based on the Residual Net Asset
Value per Share multiplied by the aggregate number of Ordinary Shares in
respect of which Shareholders have elected (or are deemed to have elected) for
the Cash Option. As the appropriation of the Company's assets to the Cash Pool
will occur on the Calculation Date, the value of Shareholders' entitlements
may be adversely affected by movements in the value of the assets contained in
the Cash Pool between the Calculation Date and the date of payment and cheque
despatch in respect of entitlements under the Cash Option (expected to be not
later than 10 Business Days from the Effective Date).

Illustrative entitlements

 

For illustrative purposes only, had the Calculation Date been 31 January 2025,
the Directors estimate that the Residual Net Asset Value per Share would have
been 232.67p. This is based on the following figures and estimates: the net
assets of the Company as at 30 January 2025 (published on 31 January 2025)
which were approximately £93 million (and on the assumption that the
Company's unlisted holding in Oxford Science Enterprises has been sold prior
to such date) minus the anticipated costs of the Proposals and of liquidating
the Company, estimated at approximately £732,000 (including VAT) (to the
extent not already accrued or paid), other assets to be transferred and the
liabilities to be discharged out of the Liquidation Pool estimated at
approximately £211,000, an illustrative termination fee in respect of the
Company's investment management agreement estimated at approximately £256,000
 and the retention anticipated to be required by the Liquidators (to meet
contingent and unknown liabilities) of £100,000.

Based on the illustrative Residual Net Asset Value per Share set out above and
the impact of the JHI Partial Fee Waiver, and assuming: (i) that there is no
change in those net assets between 30 January 2025 and the Effective Date;
(ii) that the revaluation of the OEIC Rollover Pools on the Effective Date
results in the same valuation as that performed on the Calculation Date; (iii)
that I Class OEIC Shares are issued at £6.42 per share (being the I Class
OEIC Share Subscription Price multiplied by a Dilution Adjustment of 0.54 per
cent.); (iv) that E Class OEIC Shares are issued at £1.57 per share (being
the E Class OEIC Share Subscription Price multiplied by a Dilution Adjustment
of 0.54 per cent.); and (v) that the assets in the Cash Pool are realised at
their value on the Calculation Date, this would give rise to the following
entitlements for every 1,000 Ordinary Shares held under the Proposals:

§ 363 I Class OEIC Shares; or

§ 1,486 E Class OEIC Shares; or

§ £2,326 in cash.

Summary information on the OEIC Sub-Fund

The OEIC Sub-Fund's objective is to provide a dividend income, with the
prospects for both income and capital growth over the long term (5 years or
more).

The OEIC Sub-Fund invests at least 80 per cent. of its assets in shares (also
known as equities) of companies, in any industry, in the UK. Companies will be
incorporated, headquartered, or deriving significant revenue from the UK. The
OEIC Sub-Fund will typically have a bias towards small and medium-sized
companies. The OEIC Sub-Fund may also invest in other assets including other
shares, bonds of any quality from any issuer, collective investment schemes
(including those managed by Janus Henderson), cash and money market
instruments. The OEIC Sub-Fund Investment Manager may use derivatives (complex
financial instruments) to reduce risk or to manage the OEIC Sub-Fund more
efficiently. The OEIC Sub-Fund is actively managed with reference to the FTSE
All Share Index, which is broadly representative of the companies in which it
may invest, as this can provide a useful comparator for assessing the OEIC
Sub-Fund's performance. The OEIC Sub-Fund Investment Manager has discretion to
choose investments for the OEIC Sub-Fund with weightings different to the
index or not in the index.

The OEIC Sub-Fund is actively managed with reference to the FTSE All Share
Index, The FTSE All Share Index is a measure of the combined performance of a
large number of the companies listed on the London Stock Exchange and includes
large, medium and smaller companies. It provides a useful comparison against
which the Fund's performance can be assessed over time.

Conditions to the Scheme

The Scheme is conditional, among other things, upon:

(i) the passing of all of the Scheme Resolutions to be proposed at (a) the
First Scheme General Meeting and (b) the Second Scheme General Meeting (or at
any adjournments thereof) and upon any conditions of such Resolutions being
fulfilled;

(ii) the FCA agreeing to amend the listing of the Ordinary Shares to reflect
their reclassification as Reclassified Shares for the purpose of implementing
the Scheme; and

(iii) the Directors resolving to proceed with the Scheme.

In the event that any of conditions (i)(a) or (ii) fails, the Second Scheme GM
will be adjourned indefinitely and the Scheme will lapse.

Transfer Agreement

 

Provided that the Scheme is approved by Shareholders and becomes effective,
the Company will enter into the Transfer Agreement with the Liquidators and
the OEIC (acting through the ACD) pursuant to the Scheme. The Transfer
Agreement is, as at the date of this announcement, in a form agreed between
the Company, the Liquidators and the OEIC. The Transfer Agreement provides,
among other things, that the assets of the Company in the OEIC Rollover Pools
are to be transferred to the OEIC (or its nominee), for the benefit of the
OEIC Sub-Fund, in consideration for the allotment by the OEIC Sub-Fund of OEIC
Shares to the Liquidators, as nominees for Shareholders entitled to them in
accordance with the Scheme. Thereafter, the Liquidators will renounce the
allotments of OEIC Shares in favour of the relevant Shareholders and such OEIC
Shares will be issued by the OEIC Sub-Fund to such Shareholders pursuant to
the Scheme. The Transfer Agreement excludes any liability on the part of the
Liquidators for entering into or carrying into effect the Transfer Agreement.

Costs of the Proposals

 

The Company will bear its own costs and expenses incurred in connection with
the Proposals.

Any liability for transfer taxes in respect of the transfer of certain assets
to the OEIC Sub-Fund will be borne by the OEIC Sub-Fund and met by applying
the Dilution Adjustment to the price at which the OEIC Shares are issued.

The costs payable by the Company in connection with the implementation of the
Proposals are expected to be approximately £732,000 (including VAT, where
applicable). These costs have been accrued in the Company's net asset value as
at close of business on the Latest Practicable Date.

Janus Henderson has agreed to pay any costs of the OEIC Sub-Fund in connection
with the Proposals.

Janus Henderson has also agreed to waive the management fee it would otherwise
be entitled to on the termination of its management agreement in respect of
the assets which are allocated to the OEIC Rollover Pools (the "JHI Partial
Fee Waiver"). The amount of the JHI Partial Fee Waiver shall be allocated to
the OEIC Rollover Pools in such proportion as represents the relative value of
each such OEIC Rollover Pool to the other.

Scheme General Meetings

The Proposals described in this document are conditional, among other things,
on Shareholder approval. Notices of the First Scheme GM, to be held at 9.00
a.m. on 21 February 2025 at 201 Bishopsgate, London EC2M 3AE, and the Second
Scheme GM, to be held at 9.30 a.m. on 14 March 2025 at 201 Bishopsgate, London
EC2M 3AE, are set out in the Circular.

Recommendation

The Board is unanimously of the opinion that the Proposals set out in the
Circular are in the best interests of Shareholders as a whole. Accordingly,
the Board unanimously recommends that Shareholders vote in favour of all of
the Scheme Resolutions to be proposed at the Scheme General Meetings of the
Company and that they complete and return their Forms of Proxy accordingly,
whether or not they intend to attend the meetings.

The Directors intend to vote in favour of all of the Scheme Resolutions in
respect of their beneficial holdings amounting, in aggregate, to 34,492
Ordinary Shares representing 0.1 per cent. of the Ordinary Shares in issue in
the Company as at close of business on the Latest Practicable Date.

The Board cannot, and does not, give any advice or recommendation to
Shareholders as to whether, or as to what extent, they should elect for any of
the options under the Proposals. The choice between the options available
under the Proposals will be a matter for each Shareholder to decide and will
be influenced by that Shareholder's individual investment objectives and
personal, financial and tax circumstances. Accordingly, Shareholders should,
before deciding what action to take, read carefully all the information in
this document, in the OEIC Prospectus and the OEIC KIIDS (which are available
for download at
www.janushenderson.com/en-gb/investor/product/janus-henderson-uk-equity-income-growth-fund).

Interim Dividends

As announced earlier today, the Board has declared a fourth interim dividend
in respect of the financial year to 31 October 2024, of 2.6 pence per Ordinary
Share (the "Fourth Interim Dividend"). The Fourth Interim Dividend will be
paid on 11 March 2025 to Shareholders who are on the Register as at close of
business on 21 February 2025. The ex-dividend date for the Fourth Interim
Dividend is 20 February 2025.

In relation to the period from 1 November 2024 to 31 January 2025, the
Directors have resolved that the Company will pay an interim dividend of 1.5
pence per Ordinary Share ("First Interim Dividend") in order to ensure that
the Company meets the distribution requirements to maintain investment trust
status during the period from 1 November 2024 to the Winding-up Date. The
First Interim Dividend will also be paid on 11 March 2025 to Shareholders who
are on the Register as at close of business on 21 February 2025. The
ex-dividend date for the First Interim Dividend is 20 February 2025.

Restricted Shareholders

Restricted Shareholders (being Overseas Shareholders and Untraceable
Shareholders) will be deemed to have elected for the Cash Option under the
Scheme.

It is expected that Untraceable Shareholders will not be able to satisfy the
ACD's KYC requirements and, accordingly, will be deemed to have elected for
cash pursuant to the Cash Option under the Scheme and shall be entitled to
receive payment in cash out of the Cash Pool for their Ordinary Shares.

Expected Timetable

2025

 Latest time and date for receipt of Forms of Proxy from Shareholders for the  9.00 a.m. on 19 February
 First Scheme General Meeting
 Latest time and date for receipt of the Forms of Election and/or TTE          1.00 p.m. on 19 February
 Instructions from Shareholders wishing to elect for the Cash Option
 Scheme Entitlements Record Date                                               6.00 p.m. on 19 February
 Ordinary Shares disabled in CREST                                             6.00 p.m. on 19 February
 Suspension of trading in Ordinary Shares                                      7.30 a.m. on 20 February
 Ex-dividend date for the Interim Dividends                                    20 February
 First Scheme General Meeting                                                  9.00 a.m. on 21 February
 Interim Dividends Record Date                                                 close of business on 21 February
 Calculation Date                                                              11.59 p.m. on 3 March
 Payment of the Interim Dividends                                              11 March
 Reclassification of the Ordinary Shares                                       8.00 a.m. on 12 March
 Latest time for receipt of Forms of Proxy from Shareholders for the Second    9.30 a.m. on 12 March
 Scheme General Meeting
 Suspension of dealings in Reclassified Shares                                 7.00 a.m. on 14 March
 Second Scheme General Meeting                                                 9.30 a.m. on 14 March
 Appointment of the Liquidators                                                14 March
 Effective Date and Transfer Agreement executed and implemented                14 March
 OEIC Shares issued pursuant to the Scheme                                     14 March
 First day of dealing in OEIC Shares                                           17 March
 Confirmations expected to be despatched in respect of OEIC Shares issued      Week commencing 17 March
 pursuant to the Scheme
 Cheques expected to be despatched and CREST payments made to Shareholders in  Not later than 10 Business Days from the Effective Date
 respect of the Cash Option
 Cancellation of listing of Reclassified Shares                                As soon as practicable after the Effective Date

 

Note: The times and dates set out in the expected timetable of events above
and mentioned throughout the Circular may be adjusted by the Company in which
event details of the new times and dates will be notified, as requested, to
the Financial Conduct Authority, the London Stock Exchange and, where
appropriate, Shareholders. All references to time in the Circular are to UK
time.

Defined terms used in this announcement shall, unless the context requires
otherwise, have the meanings ascribed to them in the Circular.

The Circular has been submitted to the National Storage Mechanism and will
shortly be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)  and on the
Company's website at www.hendersonopportunitiestrust.com .

For further information please contact:

   Henderson Opportunities Trust plc                  via Edelman Smithfield
   Wendy Colquhoun (Chairman)

   Edelman Smithfield (Media enquiries)               +44 (0)7785 275665 / +44 (0)7950 671 948
   John Kiely / Latika Shah

   J.P. Morgan Cazenove (Financial Adviser)           +44 (0)20 3493 8000
   William Simmonds / Rupert Budge

   Janus Henderson (Investment Manager)               +44 (0)20 7818 1818
   Dan Howe, Head of Investment Trusts

   Janus Henderson Secretarial Services UK Limited     +44 (0)20 7818 1818

   Corporate Secretary to the Company

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.

The distribution of this announcement in certain jurisdictions may be
restricted. Persons into whose possession this announcement comes are required
by the Company to inform themselves about and to observe any such
restrictions. This announcement does not constitute an offer or solicitation
by anyone in any jurisdiction in which such offer or solicitation is not
authorised or to any person to whom it is unlawful to make such offer or
solicitation.

The OEIC Shares have not been and will not be registered under the Securities
Act 1933 of the United States (as amended) ("the 1933 Act"), the United States
Investment Company Act of 1940 or the securities laws of any of the states of
the United States. The OEIC Shares may not be offered, sold or delivered
directly or indirectly in the United States or to the account or benefit of
any US Person (being any citizen or resident of the United States of America,
its territories and possessions including the State and District of Columbia
and all areas subject to its jurisdiction (including the Commonwealth of
Puerto Rico), any corporation, trust, partnership or other entity created or
organised in or under the laws of the United States of America, any state
thereof or any estate or trust the income of which is subject to United States
federal income tax, regardless of source and any person falling within the
definition of the term "U.S. Person" under Regulation S promulgated under the
United States Securities Act of 1933.

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 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 the Company 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 UK Listing Rules, the Prospectus Regulation
Rules, the Disclosure Guidance and Transparency Rules, the Prospectus
Regulation and MAR.

None of the Company 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 the Company 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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