Henderson Diversified Income Trust (HDIV) and Henderson High Income Trust (HHI) have reached an agreement to merge their operations. The London-listed trusts revealed that the proposed merger would take place through a scheme of reconstruction, with HHI winding up.
As part of the transaction, a portion of HHI’s assets and undertaking would be transferred to HDIV in exchange for the issuance of new HHI shares or cash at a 1% discount, or both.
The combined entity will continue to be managed by Janus Henderson Investors UK, with David Smith serving as the lead portfolio manager.
HDIV Chair Angus Macpherson stated, “Those shareholders who roll will maintain a similar income profile, managed by the same investment group, but with the advantage of greater scale and liquidity.”
The proposals are expected to go into effect in January. HHI Chairman Jeremy Rigg highlighted that the merger would increase the size of HHI, enhance liquidity and marketability in the company’s shares, and help reduce ongoing charges through spreading costs across a larger shareholder base.
As of 0726 GMT, HDIV shares rose by 6.4% to 66.6 pence, while HHI shares saw a slight increase of 0.3% to 157.5 pence.