TIDMHHI
RNS Number : 7525Z
Henderson High Income Trust PLC
17 March 2017
HENDERSON INVESTMENT FUNDS LIMITED
HENDERSON HIGH INCOME TRUST PLC
LEGAL ENTITY IDENTIFIER 213800OEXAGFSF7Y6G11
17 March 2017
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH
AFRICA OR ANY JURISDICTION FOR WHICH THE SAME COULD BE UNLAWFUL.
THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF
SECURITIES FOR SALE IN ANY JURISDICTION, INCLUDING IN THE UNITED
STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA
Henderson High Income Trust plc (the "Company" or "HHI")
Proposed issue of new ordinary shares in connection with the
scheme of reconstruction of Threadneedle UK Select Trust Limited
and 12 month share issuance programme
Against the backdrop of the Board's stated desire to see the
Company grow, the Board of HHI is pleased to announce the following
proposals (the "Proposals") in respect of the Company:
-- it has agreed heads of terms with the Board of Threadneedle
UK Select Trust Limited ("UKT") and Henderson Investment Funds
Limited ("Henderson") in respect of the issue of new Ordinary
Shares to shareholders in UKT who elect to roll-over their
investment, to be effected by way of a scheme of reconstruction of
UKT (the "Scheme"); and
-- in the light of ongoing investor demand for the Company's
Ordinary Shares, the Company intends, in addition to the issue of
new Ordinary Shares in connection with the Scheme, to put in place
a prospectus for a 12 month share issuance programme (the "Issuance
Programme"), which will enable the Company to issue further new
Ordinary Shares at a small premium to net asset value, commencing
with an initial offer of new Ordinary Shares at a one per cent.
premium to net asset value to complete at the same time as the
Scheme.
The Scheme and Issuance Programme together constitute the
"Proposals".
The Board believes the Proposals have a number of benefits for
existing HHI shareholders:
-- increasing the size of HHI's asset base, spreading the
Company's fixed costs over a larger capital base which should
reduce the total expense ratio;
-- improving the liquidity of the HHI shares on the secondary
market to the benefit of all shareholders; and
-- introducing a wider range of investors to the Company.
Proposed scheme of reconstruction of Threadneedle UK Select
Trust Limited
Under the heads of terms agreed by the Board, the Scheme will
involve the roll-over of part of the assets and undertaking of UKT
to HHI by way of a members' voluntary solvent scheme of
reconstruction (under the laws of Guernsey) of UKT. The merger
proposals will be subject to shareholder approval of both companies
as well as regulatory and tax approvals. It is expected that the
Scheme will become effective by the end of June 2017.
Under the Scheme, UKT qualifying shareholders will be able to
elect to receive new Ordinary Shares (the "Rollover Option") and/or
cash (the "Cash Option"). UKT Shareholders who fail to make an
election will be deemed to have elected for the Rollover
Option.
The rollover portfolio will consist of cash, cash equivalents
and UK quoted securities which fall within the HHI investment
policy and have been approved in advance by the Company's
investment manager.
New Ordinary Shares will be issued to UKT shareholders who have
elected, or are deemed to have elected, for the Rollover Option
based on the ratio of the HHI NAV (cum income, debt at par value)
to the UKT NAV, taking into account certain adjustments.
The relevant net asset values for the purposes of the Scheme
will be calculated in accordance with the respective company's
normal accounting policies and will exclude any dividends to which
UKT shareholders are not entitled. UKT shareholders will not
qualify for any HHI dividends declared prior to the Scheme becoming
effective, in particular the second interim dividend expected to be
declared ex on or around 22 June 2017.
Each party intends to bear its own costs (including in any abort
scenario) incurred in relation to the Proposals, subject to any
contribution from Henderson or its group to HHI and UKT as set out
below.
Proposed initial offer and 12 month issuance programme
The Issuance Programme has been proposed in principle by the
Board to allow the Company to issue new Ordinary Shares to satisfy
demand from investors at times when Ordinary Shares are trading at
a premium to the net asset value per Ordinary Share.
The Directors intend to apply the net proceeds of any issue
associated with the Issuance Programme in accordance with the
Company's investment policy.
New Ordinary Shares will be issued under the Issuance Programme
only (i) at a premium to net asset value; and (ii) when the
Directors believe that it is in the best interests of the Company
to do so. As a result of the new Ordinary Shares being issued under
the Scheme and the costs contribution from Henderson, referred to
below, the Company proposes to issue new Ordinary Shares under the
initial offer at a one per cent. premium to the HHI NAV. This
premium should not be taken as a guide as to the future issue
prices that may apply to further shares issued under the Issuance
Programme.
The Company intends to convene a general meeting of shareholders
to authorise the issue of new Ordinary Shares under the Scheme and
under the Issuance Programme.
Costs
Henderson has proposed a contribution to the costs of the
Scheme, equating to a sum that is equivalent to 18 months base
management fee of the total assets that rollover from UKT into HHI.
The financial value of this amount will be credited against the
proportion of the HHI prospectus costs represented by the new
Ordinary Shares issued to UKT shareholders and the balance will be
paid to UKT. Henderson has also proposed a contribution to HHI's
prospectus costs, not attributable to new Ordinary Shares issued
under the Scheme, to the extent that these costs are not covered by
the one per cent. premium to the HHI NAV charged on the new
Ordinary Shares issued pursuant to the initial offer.
Accordingly, the Board does not expect to bear any costs in
putting in place the Prospectus and participating in the Scheme
since all HHI costs are to be underwritten by Henderson.
Expected Timetable
It is currently envisaged that a shareholder circular,
prospectus and notice of general meeting setting out details of the
Scheme and seeking shareholder approval for the Scheme and Issuance
Programme will be sent to shareholders at the end of May 2017 and
that the Scheme and first issue under the Issuance Programme will
become effective by the end of June 2017.
The Scheme will be conditional on, amongst other things, the
recommendation of the Boards of both companies, the necessary
shareholder approvals by the shareholders of both companies and the
appropriate regulatory and tax approvals in due course.
Margaret Littlejohns, Chairman, commented:
"The Board of Henderson High Income Trust plc is delighted to be
supporting this transaction. We believe that our long term track
record of delivering regular high income and capital growth over
time from a portfolio predominantly invested in UK equities will be
a compelling rollover opportunity for Threadneedle UK Select
shareholders."
For further information, please contact:
James de Sausmarez
Director and Head of Investment Trusts
Henderson Global Investors
Telephone: 020 7818 3349
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via Regulatory Information Service
this inside information is now considered to be in the public
domain.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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