The merger of a pair of investment trusts will create the UK’s largest listed infrastructure investment company.
The boards of HICL and TRIG have agreed to combine the two companies.
They said the merger will mean the company’s “enhanced investment mandate” will cover the full spectrum of infrastructure opportunities.
Mike Bane, chair of HICL, said: “The combination of HICL and TRIG represents a unique opportunity to capture the key megatrends shaping the infrastructure market today, which increasingly straddle both core infrastructure and the energy transition.
“By combining two complementary portfolios and teams, the combined company will have the profile, expertise and access to capital to seek enhanced returns from a reinvigorated investment strategy.”
An initial annual dividend target of 9 pence per share will underpin a target NAV total return of over 10 per cent a year over the medium term.
The boards believe the combination will appeal to a broader investor base.
It will see TRIG wound down and HICL will issue new shares to TRIG shareholders.
They will also have the option to elect for a partial cash offer.
Richard Morse, chair of TRIG, added: “This is a combination that we believe offers a transformational opportunity to drive growth and deliver a resilient, forward-looking investment proposition.
“Together, HICL and TRIG will form the UK’s largest listed infrastructure and renewables investment company, with the scale, liquidity, and balance sheet strength to better access a broader range of global opportunities and deliver sustainable long-term value for shareholders.”
Assuming a full take up of the £250mn partial cash option, HICL shareholders are expected to hold approximately 56 per cent and TRIG shareholders around 44 per cent of the combined company’s issued share capital.
InfraRed, which acts as investment manager to both trusts will continue in that role for the combined company.
tara.o’connor@ft.com
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