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HINT woos Global investors with fee cut and tender offer

Henderson International Income Trust pulls out the stops to encourage shareholders in Henderson Global to roll over their investments following the latter's liquidation.

HINT woos Global investors with fee cut and tender offer

(Correction: details have been added to clarify the terms of Henderson International Income's possible tender offer and the cost to Henderson Global shareholders of switching into either HINT shares or Bankers'.) 

Henderson International Income Trust (HINT ) is pulling out the stops to encourage shareholders in stable mate Henderson Global (HGL ) to roll over their investments into its fund following the latter's planned liquidation next month.

According to a circular being sent to Henderson Global shareholders, fund manager Henderson Global Investors has agreed to cut its annual management fee for HINT from 0.75% to 0.65%, providing Global investors vote to wind up their fund next month.

Henderson International will also introduce a discount control mechanism to ensure Global investors won't get stuck in an underperforming share if they transfer to HINT.

This means if HINT shares trade at an average of more than 5% below net asset value (NAV) in the 90 days after the roll-over, the company will launch a tender offer for up to 20% of the new shares it has issued to Global investors. 

Discounts on HINT and Bankers (BNKR ) – the other roll-over option being offered to Global investors – have widened to 7.7% and 8.5% since the board of Henderson Global announced its strategic review earlier this month.

The board of Henderson Global concluded the investment trust was too small and did not have a sufficiently distinct proposition to have a viable future. It proposed shareholders be given the choice of withdrawing their money or transferring to either HINT or Bankers, a bigger global trust also run by Hendersons.

Henderson Global shareholders are being nudged to choose HINT whose new shares they can buy at net asset value whereas a switch to Bankers will cost them NAV plus 1%.

A circular detailing the proposals has been sent to the £139 million trust's shareholders, who have been asked to vote on or by 15 April.

If the plans are approved Henderson Global will pay a special, final dividend of 2.5p per share on 19 April from its break-up. Two of its non-executive directors, Richard Hills and Aidan Lisser, will join HINT's board.

If the wind-up and reconstruction go ahead, the trust will enter voluntary liquidation a week later and its assets divided into a liquidation fund, for those investors seeking an exit, or moved into roll-over funds linked to HINT and Bankers for investors moving to those trusts.

The investment trust's board says the mechanism offers its shareholders a cost-effective exit and switch into an appropriate global income or global growth fund.

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