(Alliance News) - Honeycomb Investment Trust PLC on Friday said it will launch a GBP200 million share buyback following the completion of its merger with Pollen Street Secured Lending PLC.
Pollen Street Secured Lending is a trust part of the Pollen Street Capital Group that also owns Honeycomb's investment manager Pollen Street Capital Ltd.
Earlier in August, Honeycomb announced its intention to merge with Pollen Street, stating that the merger allows both companies to increase their scale with assets totalling around GBP1.5 billion, diversify its portfolio and put combined entity in a place to "take full advantage of any improvement in the market environment."
It added that Pollen Street shareholders will receive 0.9 shares in the trust for each share of its own, giving shareholders approximately 65% of combined group ownership.
On Thursday, the London-based investment trust said it plans to launch a buyback following the completion of the merger, stating that the buyback price will be at an "attractive premium to the prevailing trading levels", at a price no lower than 10% discount to the net asset value per share of the combined companies.
"Honeycomb Investment Trust remains convinced of the strategic rationale of combining both companies to create the leading UK specialty finance investment trust. Honeycomb Investment Trust believes that the proposed merger provides significant value creation potential for both sets of shareholders, providing an opportunity for both sets of shareholders to realise NAV over time in more normalised markets. However, recognising that certain Pollen Street Secured Lending shareholders may have a preference for upfront liquidity, Honeycomb Investment Trust will provide an attractive liquidity opportunity following completion of the merger," Honeycomb Investment Trust said.
Honeycomb Investment added that certain of its largest shareholders - who also hold a combined 31% stake in Pollen Street - are in support of the proposed merger.
Shares in Honeycomb were trading 3.8% higher at 791.49 pence each on Friday afternoon in London. Pollen Street Secured Lending shares were trading 0.5% lower at 792.00p each.
By Ife Taiwo; ifetaiwo@alliancenews.com
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