Henderson European Focus and Henderson EuroTrust dish out a handful of merger sweeteners. Pantheon International moves to Step 2 of its Capital Allocation Policy and abrdn Equity Income offers one of the highest yields of any equity-orientated investment trust.

By Frank Buhagiar

Henderson European Focus and Henderson EuroTrust merger sweeteners

Henderson European Focus and Henderson EuroTrust merger sweeteners
Henderson European Focus (HEFT) and Henderson EuroTrust (HNE) have added a few sweeteners to their merger proposals. According to HEFT’s press release, the two companies have agreed the following revised merger terms:

Cash exit option limit upped to 15% of each company’s issued share capital (5% previously)

Manager Janus Henderson contributing £1.55m to the deal’s costs to ensure the merger is cost-neutral for remaining shareholders

A further reduction in the second management fee tier from 50 bps p.a. to 47.5 bps p.a. – fees will now be charged at 60 bps p.a. on net assets up to £500 million; 47.5 bps p.a. on net assets equal to and in excess of £500 million; and up to 45 bps p.a. on net assets equal to and in excess of £1 billion

As well as the previous commitment of a 5-yearly performance-related tender, the combined trust will consider additional opportunities to realise some of its investment.

Winterflood: ‘We noted at the time of the initial announcement that the proposed merger between HEFT and HNE made a lot of sense and offered a number of benefits to remaining shareholders. As such, any further improvements in terms are naturally welcome.’

Pantheon International moves to Step 2 of Capital Allocation Policy
Pantheon International (PIN) provided an update on its three-step Capital Allocation Policy (CAP). Step 1: Repurchasing up to £200m of its own shares, is nearing completion with £189.6m shares bought back at the last count. Step 2: PIN investing a portion of future cash-flows (after capital calls, ongoing charges and expected near-term cash outflows such as debt repayments) in its own shares as well as new investment opportunities. The amount set aside for repurchases under Step 2 will depend on the discount the shares are trading at – for 50%+ discounts, 51%-75% of cashflows will go towards buybacks; for 30%-49% discounts, 26%-50%; and for 20%-29% discounts, up to 25% will be used. Step 3: Upping marketing efforts.

Numis: ‘We believe Pantheon International’s approach to buybacks and capital allocation has been a positive development to shareholders. Pantheon International has returned c.£40m through buybacks and £150m via a tender since August 2023. This is reflected in a consistently narrower discount than HVPE, its closest and largest peer, since the adoption of the capital allocation policy.’

Dividend Watch


BlackRock Smaller Companies (BRSC) maintains Dividend Hero status. As per the recent finals, BRSC announced a final dividend of 27p per share which, when combined with the 15p interim payout, represents total dividends of 42p per share for the year. That’s a 5% increase compared to the previous year and maintains the run of increasing the annual dividend every year since 2003 as well as BRSC’s status as one of the AIC’s Dividend Heroes – investment companies that have increased their dividends for 20+ consecutive years. For the record, the annualised increase in dividends paid since 2003 stands at 10.9%.

abrdn Equity Income (AEI) sees dividend yield hit 8.3%. According to Chair, Sarika Patel’s, Half-year statement, AEI remains on track to pay out minimum total dividends for the year of 22.9p per share. Based on the 31 March 2024 share price of 277.0p, this equates to a dividend yield of 8.3%, ‘amongst the highest of any investment trust invested in equities.’

NextEnergy Solar (NESF) ups dividend target. The title of the company’s 15 May 2024 press release pretty much covers it – 11th Dividend Target Increase – but a couple of fillers: 8.43p per share dividend target for the year ending 31 March 2025; a 1% increase on the year; dividend cover forecast to be between 1.1x-1.3x; and NESF has now declared £345m dividends or 67.8p per share since inception.