The boards of Henderson European Focus Trust plc (HEFT) and Henderson EuroTrust plc (HNE) are pleased to announce that both companies have signed Heads of Terms in respect of a proposed merger of interests to form Henderson European Trust plc – an enlarged, flagship European investment trust to be managed by the European Equity team at Janus Henderson Investors.
Henderson European Trust plc will be co-managed by Tom O’Hara and Jamie Ross, currently portfolio managers of HEFT and HNE respectively. Henderson European Trust plc will bring together their respective expertise and proven track records of benchmark outperformance under a single mandate: to maximise total return by investing in companies predominantly listed in Europe ex UK.
Its focus will be on Europe’s “global champions” – large, established and well-managed businesses operating internationally but based in Europe. Henderson European Trust plc expects to hold a concentrated list of stocks, selected with no particular style bias but with an emphasis on potential for long-term growth in the context of enduring global trends.
The boards of HEFT and HNE believe that the Proposals will offer shareholders of Henderson European Trust plc benefits, which include:
- A compelling investment case: Henderson European Trust plc, the Combined Trust, will provide shareholders with a flagship Europe ex UK equities proposition, seeking to maximize total return from a portfolio of Janus Henderson’s assessment of Europe’s biggest and best companies, selected according to long-standing global trends and with an emphasis on substantial, well-managed businesses, with sustainable business models.
- Demonstrable track record of strong performance: HEFT’s NAV total return over three, five and ten years to 29 February 2024 has been 39.95%, 82.90%, and 160.54% respectively. Tom O’Hara has co-managed the portfolio since 2020. HNE has been managed solely by Jamie Ross since 2019. Its NAV total return over three, five and ten years to 29 February 2024 has been 17.80%, 66.39% and 151.94% respectively.
- Increased scale: As a result of the Proposals, Henderson European Trust plc, the Combined Trust, is anticipated to have net assets of circa £750 million (based on valuations as at 29 February 2024) and, assuming full take-up of the cash exit opportunities (see ‘Structure of the Proposals’ below), would become the second-largest investment company in the AIC European sector. It is also expected to be eligible for inclusion in the FTSE 250 Index. The enhanced scale of Henderson European Trust plc, the Combined Trust, should improve secondary market liquidity, as well as raise the profile and help marketability.
- Continuity of exposure: HEFT and HNE have over 50% of common holdings by value, and the majority of the portfolio of Henderson European Trust plc, the Combined Trust, is expected to comprise assets currently held by at least one of the companies. This complementarity of holdings and style will reduce the extent of any portfolio realignment required in connection with the Proposals.
- Reduced OCR: The Proposals will reduce fixed costs proportionately and, along with the revised management fees, produce a competitive OCR estimated to be less than 0.70% compared to HEFT’s current OCR of 0.80% and HNE’s of 0.79%.
- Reduced OCR: The Proposals will reduce fixed costs proportionately and, along with the revised management fees, produce a competitive OCR estimated to be less than 0.70% compared to HEFT’s current OCR of 0.80% and HNE’s of 0.79%.
The Proposals will be subject to approval by the shareholders of both HEFT and HNE in addition to regulatory and tax approvals.
It is currently envisaged that the documentation in connection with the Proposals will be sent to each company’s shareholders by the end of May 2024 with a view to convening general meetings in June 2024. The Proposals are anticipated to conclude by the end of June 2024.
The Chair of HEFT, Vicky Hastings, and the Chair of HNE, Nicola Ralston, said:
“Henderson European Trust plc brings together two investment trusts with excellent long-term performance and highly regarded portfolio managers. We strongly believe this combination will create a single company which stands to be much more than the sum of its parts: enhanced scale resulting in reduced ongoing charges and improved market liquidity; recognised investment prowess backed by deep resources within the European team at Janus Henderson; structured at no cost of combination to ongoing shareholders.”
On behalf of Janus Henderson Investors, Dan Howe, Head of Investment Companies, said: “We expect that this flagship investment trust, managed within our award-winning European team, will appeal to investors looking for exposure and performance from ‘global champions’ based in Europe, a region so often overlooked but that is home to many of the world’s biggest, best and most-enduring companies.”
You can read the full announcement here: https://www.londonstockexchange.com/news-article/HEFT/proposed-merger-of-interests-of-heft-and-hne/16378432
