HEFT Henderson European Focus Trust Plc

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 HEFT is Janus Henderson Secretarial Services UK Limited acting as corporate secretary.

14 May 2024

Henderson European Focus Trust plc (the "Company" or "HEFT")

Merger Update 

Introduction

The board of HEFT (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 EuroTrust plc ("HNE") 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 35.4% and 37.6% 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.

Amendment to the terms of the Proposals

The Board notes the announcement made by HNE today and confirms that HEFT and HNE have agreed revised terms in respect of the proposed merger of interests with HNE (the "Updated Proposals") which involve the following amendments to the Proposals:

·      Increased cash option: Under the Proposals, shareholders of HNE 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 shareholders of HEFT for up to 5% of HEFT's issued share capital, which broadly reflected the cash exit being provided for shareholders of HNE. Under the Updated Proposals, the limits on the cash exit under the scheme and the HEFT tender offer have 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 were 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 management 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, but excluding, to £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.

The terms of the Proposals have been revised in order that the recommendations made by the Boards of both HEFT and HNE remain commercially competitive for their shareholders.

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:

Notes

Legal Entity Identifier:

HEFT: 213800GS89AL1DK3IN50

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 HEFT 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 HEFT 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 HEFT 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.