Henderson High Income Trust Regulatory News (HHI)

Henderson High Income / Henderson Diversified Income - Flash note from QuotedData

4th October 2023

Merger terms agreed

Henderson Diversified Income (HDIV) has agreed heads of terms for a combination with Henderson High Income (HHI). As part of the deal, shareholders in HDIV will have the option to take cash for all or part of their holding if they choose.

In July 2023, HDIV's chairman noted (see our news story here) that the trust had shrunk through share buybacks, and that this was inflating its average running costs and affecting liquidity in its shares. More importantly, he also made some observations about the fund's investment approach (devised at launch in 2007) and the impact that this might be having on the sustainability of HDIV's income and shareholders' total returns (see page 4).

The HDIV board invited proposals from a number of investment companies with alternative investment processes, and believes that a combination with HHI offers numerous benefits. There are also benefits for HHI shareholders if HHI is able to expand. In addition, as we detail on page 7, Janus Henderson (manager of both trusts) is making a considerable contribution towards the costs of the scheme.

It will be a shame to see HDIV go, but a combination with HHI looks like a sensible option to us. There is little-to-no income dilution for HDIV shareholders, a small immediate capital uplift, and better prospects for capital growth. HHI will still offer some exposure to the higher yields that are now available from bonds, and it should be a bigger, more appealing, more liquid, and more efficient trust.

Full Research:

https://quoteddata.com/research/henderson-high-income-henderson-diversified-income-merger-terms-agreed-qd/

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NB: Marten & Co was paid to produce this note on Henderson High Income Trust Plc and Henderson Diversified Income Trust Plc and it is for information purposes only. It is not intended to encourage the reader to deal in the security or securities mentioned in this report. Please read the important information at the back of this note. QuotedData is a trading name of Marten & Co Limited which is authorised and regulated by the Financial Conduct Authority. Marten & Co is not permitted to provide investment advice to individual investors categorised as Retail Clients under the rules of the Financial Conduct Authority.

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