Proposed Combination with Henderson Diversified

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO, THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, IN ANY MEMBER STATE OF THE EEA OR IN ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in the United States or in any other jurisdiction in which the same would be unlawful. Neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

4 October 2023

Henderson High Income Trust plc

Legal Entity Identifier: 213800OEXAGFSF7Y6G11

Proposed Combination with Henderson Diversified Income Trust plc

Introduction

The Board of Henderson High Income Trust plc (the "Company" or "HHI") is pleased to announce that it has agreed heads of terms with the Board of Henderson Diversified Income Trust plc ("HDIV") in respect of a proposed combination of HDIV with HHI. The combination, if approved by each company's shareholders, will be effected by way of a scheme of reconstruction and winding up of HDIV under section 110 of the Insolvency Act 1986 (the "Scheme") and the associated transfer of part of the assets and undertaking of HDIV to HHI in exchange for the issue of new ordinary shares in HHI ("New HHI Shares") (together the "Proposals").

Following implementation of the Proposals, the enlarged HHI will continue to be managed, on the same basis as currently, by Janus Henderson Investors UK Limited ("Janus Henderson") with David Smith continuing as the lead portfolio manager, supported by the Janus Henderson Global Equity Income team and the fixed income team for the bond allocation. The Company's investment objective and policy will not be amended in connection with the Proposals.

The Board of HHI believes that, if the Proposals are implemented, HHI shareholders will benefit from, amongst other things, the economies of scale that are expected to result from the enlarged asset base, including improved market liquidity in HHI shares and cost efficiencies.

The Proposals will be subject to approval by the shareholders of both HHI and HDIV in addition to regulatory and tax approvals.

Summary of the Scheme

The Proposals will be effected by way of a scheme of reconstruction of HDIV under section 110 of the Insolvency Act 1986, resulting in the voluntary winding up of HDIV and the transfer of part of HDIV's cash, assets and undertaking to HHI on a Formula Asset Value ("FAV") for FAV basis.

Under the Scheme, HDIV shareholders will be entitled to elect to receive in respect of some or all of their HDIV shares:

·           New HHI Shares (the "Rollover Option"); and/or

·           cash (the "Cash Option").

The Cash Option will be offered at a discount of 1.0 per cent. to the HDIV NAV per share (the "Cash Discount"). There will be no limit on the number of HDIV shares which may be elected for the Cash Option. New HHI Shares will be issued as the default option under the Scheme in the event that HDIV shareholders do not make a valid election under the Scheme.

As noted above, the Scheme will be undertaken on a FAV for FAV basis. The FAV of HHI (the "HHI FAV") and the FAV of HDIV (the "HDIV FAV") for the purposes of the Scheme will be calculated in accordance with the respective company's normal accounting policies and will take into account any respective costs, in excess of the Janus Henderson Cost Contribution (as defined below), payable by each company, with the exception of stamp duty and listing fees which will be paid by the enlarged HHI, and any dividends declared but not paid prior to the calculation date.

The HHI FAV will be equal to the HHI NAV, subject to the aforementioned adjustments, plus a premium of 1.0 per cent. The uplift in FAV delivered by the Cash Discount will be for the benefit of the HDIV rollover shareholders.

The Scheme will be subject to approval by the shareholders of both companies in addition to regulatory and tax approvals. In accordance with customary practice for such transactions involving investment trusts, the City Code on Takeovers and Mergers is not expected to apply to the Scheme. A timetable and further details of the Scheme will be announced in due course.

Benefits of the Proposals

The Board believes that, if implemented, the Proposals will have a number of benefits for HHI shareholders, including:

·      Enhanced liquidity: The scale of the enlarged HHI is expected to improve the marketability and liquidity of HHI's shares.

·      Lower ongoing charges ratio: Existing and new shareholders in HHI are expected to benefit from a lower ongoing charges ratio with the enlarged Company's fixed costs spread over a larger asset base.

·      Significant cost contribution from Janus Henderson: Janus Henderson will offer a contribution to the costs of the Proposals which, combined with the premium on the issue price of the New HHI Shares, will ensure that there will be no dilution to the Company's NAV per share.

Costs of the Proposals and Janus Henderson Contribution

As noted above, Janus Henderson has undertaken to make a contribution to the costs of the Proposals. This contribution will be calculated as 1.25 per cent of the assets transferred to HHI by HDIV, up to a maximum contribution of £1.1 million and subject to a minimum contribution of £360,000, whether or not the Scheme is implemented (the "Janus Henderson Contribution"). The Janus Henderson Contribution will be allocated first to pay HHI's fixed costs, up to a cap of £550,000, with any balance of the Janus Henderson Contribution allocated to pay HDIV's costs. The Janus Henderson Contribution will be reflected in the relevant FAVs of each company.

Expected timetable

A circular to shareholders of the Company, providing further details of the Proposals and convening a general meeting to approve the Proposals, and a prospectus in respect of the issue of New HHI Shares in connection with the Scheme are expected to be published by the Company in December 2023. The Proposals are anticipated to become effective in January 2024.

The Chairman of HHI, Jeremy Rigg, commented:

"This combination offers attractive benefits for our existing shareholders and shareholders in HDIV who elect for the rollover option. Supported by the Janus Henderson group, the combination will increase the size of HHI, improve the liquidity and marketability in the Company's shares and help to reduce the ongoing charges ratio by spreading costs across a larger shareholder base, which is in the interests of both existing and new shareholders.

HHI has a strong track record of providing a high level of income for shareholders whilst also delivering long-term capital growth and the Company remains committed and focused on continuing to deliver on these objectives."

Important Information

This announcement contains information that is inside information for the purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended (the "Market Abuse Regulation"). The person responsible for arranging for the release of this announcement on behalf of Henderson High Income Trust plc is Janus Henderson Secretarial Services UK Limited acting as Corporate Secretary.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.