Henderson High Income Trust PLC on Wednesday proposed a merger with Henderson Diversified Income Trust PLC.
The companies agreed terms, which would be effected via winding up Henderson Diversified Income. The planned merger is subject to approval by shareholders from both companies.
Henderson High Income is a company that provides investors with a high dividend income stream while maintaining the prospect of capital growth, while Henderson Diversified Income is focused on long-term fixed income assets to provide an income stream for shareholders.
Henderson High Income said it expects enhanced liquidity, a reduced ongoing charges ratio and ‘significant’ cost contribution from Janus Henderson, a global asset management group that manages both companies and will manage the potential enlarged company.
Janus Henderson will make a contribution to the costs of the merger plan of around 1.25% of the assets transferred to Henderson High Income from Henderson Diversified Income, with a minimum contribution of £360,000 and a maximum contribution of £1.1 million.
Henderson High Income expects the merger, if accepted by shareholders, to become effective in January.
Henderson High Income Chair Jeremy Rigg said: ‘This combination offers attractive benefits for our existing shareholders and shareholders in HDIV who elect for the rollover option. Supported by the Janus Henderson group, the combination will increase the size of HHI, improve the liquidity and marketability in the company’s shares and help to reduce the ongoing charges ratio by spreading costs across a larger shareholder base, which is in the interests of both existing and new shareholders.
‘HHI has a strong track record of providing a high level of income for shareholders whilst also delivering long-term capital growth and the company remains committed and focused on continuing to deliver on these objectives.’
Henderson High Income shares were flat at 157.00 pence each on Wednesday afternoon in London, while Henderson Diversified Income shares rose 3.0% to 64.50 pence each.
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