HOT Henderson Opportunities Trust Plc

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

3 February 2025

Henderson Opportunities Trust plc

Legal Entity Identifier: 2138005D884NPGHFQS77

Publication of Circular in connection with the Recommended Proposals for the Reconstruction and Voluntary Winding-up of the Company

Introduction

The Board of Henderson Opportunities Trust plc (the "Company" or "HOT") announced on 18 December 2024 that, in light of the Company's performance and forthcoming continuation vote, it had instructed advisers to commence work on putting forward a scheme of reconstruction to give all Shareholders a choice between ongoing alternative investment and/or a full cash exit at NAV.

The Board is today putting forward proposals to Shareholders for the winding-up of the Company by way of a scheme of reconstruction pursuant to Section 110 of the Insolvency Act 1986 (the "Scheme"). Under the terms of the Scheme, Shareholders will be offered the opportunity to roll over their investment at Residual NAV into Janus Henderson UK Equity Income & Growth Fund (the "OEIC Sub-Fund"), a sub-fund of Janus Henderson UK & Europe Funds (the "OEIC") whose portfolio is also managed by Janus Henderson Investors UK Limited (the "Investment Manager"), or to receive cash in respect of their investment in the Company, or a combination of both (the "Proposals").

As part of its campaign, Saba has publicly stated its aim to deliver substantial liquidity options for shareholders. The Scheme is designed to deliver full liquidity for Shareholders. However, given Saba's current interest in 29.10 per cent of the Company's issued share capital (excluding treasury shares and as notified to the Company as at close of business on the Latest Practicable Date) Saba will be able to block the Scheme by voting against the Scheme Resolutions should it decide to do so.

In the event that the Scheme Resolutions are not passed and the Scheme does not become effective, the Board will need to consider alternative proposals for the future of the Company that are in the best interests of Shareholders as a whole.

Under the Proposals, which are conditional upon, amongst other things, the passing of all of the Scheme Resolutions at the Scheme General Meetings, Shareholders (other than Restricted Shareholders) will be able to elect (in whole or in part and in accordance with their personal investment requirements) to:

·              roll over their investment at Residual NAV into Janus Henderson Equity Income & Growth Fund, a sub-fund of Janus Henderson UK & Europe Funds and to receive either I Class OEIC Shares (which are available to corporate investors, e.g. companies, corporate nominees, custodian banks, fund supermarkets and fund platforms) or to receive E Class OEIC Shares (which are available to individual investors who hold their shares directly and where no bundled commission payments for financial advice are made) (the "Rollover Options"); and/or

·              receive their entitlement upon the winding-up of the Company in cash (the "Cash Option").

Shareholders (other than Restricted Shareholders) that make no Election (or no valid Election) will be deemed to have elected for the relevant class of OEIC Shares.

The Board announces that the Company has today published a circular (the "Circular") to provide Shareholders with further details of the Proposals and to convene two scheme general meetings of the Company (the "Scheme General Meetings") to seek approval from Shareholders for the implementation of the Proposals.

Background to the Proposals

At the Company's annual general meeting in March 2023, although Shareholders voted in favour of the triennial resolution for the continuation of the Company, 24.2 per cent. of the votes cast were voted against. In response to Shareholder feedback around the Company's size, its longer-term NAV and share price performance, the discount at which the Ordinary Shares traded and the limited share liquidity, the Board took various steps with a view to creating additional demand for the Ordinary Shares and enhancing value for Shareholders. These included removing the performance fee, effecting a share split, reducing gearing and increasing the focus on marketing. Working with the fund managers, the Board also undertook a detailed review of the portfolio scrutinising risk, volatility and allocation. This resulted in a reduction in gearing and in the Company's exposure to AIM stocks. 

Following the last continuation vote, the Board also started exploring strategic options for the future of the Company. These included a possible combination with another investment trust or a change of mandate. In November 2024, the Board concluded that, although in the most recent financial year ended 31 October 2024 the Company had seen some recovery and had modestly outperformed its benchmark, in the Board's view and taking into account the various challenges the Company continued to face, Shareholders' interests would be best served through pursuit of a strategic option. Having assessed all available choices, the Board then determined that proposing a scheme of reconstruction - offering a full cash exit at NAV and/or the opportunity to roll into an open-ended fund - was the best achievable option.

Benefits of the Proposals

The Board believes that the Proposals should have the following benefits for all Shareholders:

·      Opportunity for a full unrestricted cash exit: An unlimited cash exit option will give Shareholders the option to realise all or part of their holding

·      Ability to stay invested in a tax efficient manner: Shareholders who may be subject to UK capital gains tax or corporation tax on chargeable gains should generally be able to roll over their investment at Residual NAV into the OEIC Sub-Fund and thereby continue to receive investment returns without triggering an immediate liability to UK capital gains tax or corporation tax on chargeable gains; and

·      Less cost implications: Shareholders electing for the applicable Rollover Option will not suffer the full dealing costs that would be incurred on the realisation of the Company's entire portfolio in the event of a simple winding-up.

The Proposals

Under the Proposals, the Company will be wound up on the Winding-up Date by means of a members' voluntary liquidation pursuant to a scheme of reconstruction under Section 110 of the Insolvency Act 1986 and Shareholders may elect to receive OEIC Shares in the OEIC Sub-Fund (being Janus Henderson UK Equity Income & Growth Fund) and/or cash in respect of all or part of their holding of Ordinary Shares in the Company. Shareholders who elect to roll over their investment at Residual NAV into the OEIC Sub-Fund will receive the relevant class of OEIC Shares and, in consideration of such issue, the Company will transfer a portion of its net assets to the OEIC (for the benefit of the OEIC Sub-Fund). In this way, it is envisaged that it should be possible for most UK resident Shareholders who hold their Ordinary Shares as an investment to be given a tax-efficient rollover of their entitlements.

The OEIC Shares will be issued at the prevailing net asset value per I Class OEIC Share or E Class OEIC Share (as applicable) as at 12.00 noon on the Effective Date multiplied by the applicable Dilution Adjustment.

Shareholders who elect for the Cash Option will be sent a cheque in respect of their entitlement if they hold Ordinary Shares in certificated form or receive payment through CREST in respect of their entitlement if they hold Ordinary Shares in uncertificated form.

The Rollover Options

A Shareholder who elects to roll over all or part of their investment into the OEIC Sub-Fund will be entitled to receive such number of either I Class OEIC Shares or E Class OEIC Shares as is produced by dividing the proportion of the value of either the I Class Rollover Pool or the E Class Rollover Pool (as applicable) to which he/she/it is entitled by the applicable OEIC Share Subscription Price (further details are set out in Part 2 of the Circular, in particular, in paragraph 10.3 therein). The appropriation of the Company's assets to the I Class Rollover Pool and the E Class Rollover Pool will occur on the Calculation Date and will be based on the Residual Net Asset Value per Share multiplied by the aggregate number of Ordinary Shares in respect of which Shareholders have elected (or deemed to have elected) for the relevant Rollover Option. As the appropriation of the Company's assets to the OEIC Rollover Pools will occur on the Calculation Date, the value of Shareholders' entitlements may be adversely affected by movements in the value of the assets contained in the OEIC Rollover Pools between the Calculation Date and the Effective Date.

The Cash Option

A Shareholder who elects for the Cash Option will be entitled to receive the net realisation proceeds of such portion of the Cash Pool to which he/she/it is entitled. The appropriation of the Company's assets to the Cash Pool will occur on the Calculation Date and will be based on the Residual Net Asset Value per Share multiplied by the aggregate number of Ordinary Shares in respect of which Shareholders have elected (or are deemed to have elected) for the Cash Option. As the appropriation of the Company's assets to the Cash Pool will occur on the Calculation Date, the value of Shareholders' entitlements may be adversely affected by movements in the value of the assets contained in the Cash Pool between the Calculation Date and the date of payment and cheque despatch in respect of entitlements under the Cash Option (expected to be not later than 10 Business Days from the Effective Date).

Illustrative entitlements

For illustrative purposes only, had the Calculation Date been 31 January 2025, the Directors estimate that the Residual Net Asset Value per Share would have been 232.67p. This is based on the following figures and estimates: the net assets of the Company as at 30 January 2025 (published on 31 January 2025) which were approximately £93 million (and on the assumption that the Company's unlisted holding in Oxford Science Enterprises has been sold prior to such date) minus the anticipated costs of the Proposals and of liquidating the Company, estimated at approximately £732,000 (including VAT) (to the extent not already accrued or paid), other assets to be transferred and the liabilities to be discharged out of the Liquidation Pool estimated at approximately £211,000, an illustrative termination fee in respect of the Company's investment management agreement estimated at approximately £256,000  and the retention anticipated to be required by the Liquidators (to meet contingent and unknown liabilities) of £100,000.

Based on the illustrative Residual Net Asset Value per Share set out above and the impact of the JHI Partial Fee Waiver, and assuming: (i) that there is no change in those net assets between 30 January 2025 and the Effective Date; (ii) that the revaluation of the OEIC Rollover Pools on the Effective Date results in the same valuation as that performed on the Calculation Date; (iii) that I Class OEIC Shares are issued at £6.42 per share (being the I Class OEIC Share Subscription Price multiplied by a Dilution Adjustment of 0.54 per cent.); (iv) that E Class OEIC Shares are issued at £1.57 per share (being the E Class OEIC Share Subscription Price multiplied by a Dilution Adjustment of 0.54 per cent.); and (v) that the assets in the Cash Pool are realised at their value on the Calculation Date, this would give rise to the following entitlements for every 1,000 Ordinary Shares held under the Proposals:

§ 363 I Class OEIC Shares; or

§ 1,486 E Class OEIC Shares; or

§ £2,326 in cash.

Summary information on the OEIC Sub-Fund

The OEIC Sub-Fund's objective is to provide a dividend income, with the prospects for both income and capital growth over the long term (5 years or more).

The OEIC Sub-Fund invests at least 80 per cent. of its assets in shares (also known as equities) of companies, in any industry, in the UK. Companies will be incorporated, headquartered, or deriving significant revenue from the UK. The OEIC Sub-Fund will typically have a bias towards small and medium-sized companies. The OEIC Sub-Fund may also invest in other assets including other shares, bonds of any quality from any issuer, collective investment schemes (including those managed by Janus Henderson), cash and money market instruments. The OEIC Sub-Fund Investment Manager may use derivatives (complex financial instruments) to reduce risk or to manage the OEIC Sub-Fund more efficiently. The OEIC Sub-Fund is actively managed with reference to the FTSE All Share Index, which is broadly representative of the companies in which it may invest, as this can provide a useful comparator for assessing the OEIC Sub-Fund's performance. The OEIC Sub-Fund Investment Manager has discretion to choose investments for the OEIC Sub-Fund with weightings different to the index or not in the index.

The OEIC Sub-Fund is actively managed with reference to the FTSE All Share Index, The FTSE All Share Index is a measure of the combined performance of a large number of the companies listed on the London Stock Exchange and includes large, medium and smaller companies. It provides a useful comparison against which the Fund's performance can be assessed over time.

Conditions to the Scheme

The Scheme is conditional, among other things, upon:

(i) the passing of all of the Scheme Resolutions to be proposed at (a) the First Scheme General Meeting and (b) the Second Scheme General Meeting (or at any adjournments thereof) and upon any conditions of such Resolutions being fulfilled;

(ii) the FCA agreeing to amend the listing of the Ordinary Shares to reflect their reclassification as Reclassified Shares for the purpose of implementing the Scheme; and

(iii) the Directors resolving to proceed with the Scheme.

In the event that any of conditions (i)(a) or (ii) fails, the Second Scheme GM will be adjourned indefinitely and the Scheme will lapse.

Transfer Agreement

Provided that the Scheme is approved by Shareholders and becomes effective, the Company will enter into the Transfer Agreement with the Liquidators and the OEIC (acting through the ACD) pursuant to the Scheme. The Transfer Agreement is, as at the date of this announcement, in a form agreed between the Company, the Liquidators and the OEIC. The Transfer Agreement provides, among other things, that the assets of the Company in the OEIC Rollover Pools are to be transferred to the OEIC (or its nominee), for the benefit of the OEIC Sub-Fund, in consideration for the allotment by the OEIC Sub-Fund of OEIC Shares to the Liquidators, as nominees for Shareholders entitled to them in accordance with the Scheme. Thereafter, the Liquidators will renounce the allotments of OEIC Shares in favour of the relevant Shareholders and such OEIC Shares will be issued by the OEIC Sub-Fund to such Shareholders pursuant to the Scheme. The Transfer Agreement excludes any liability on the part of the Liquidators for entering into or carrying into effect the Transfer Agreement.

Costs of the Proposals

The Company will bear its own costs and expenses incurred in connection with the Proposals.

Any liability for transfer taxes in respect of the transfer of certain assets to the OEIC Sub-Fund will be borne by the OEIC Sub-Fund and met by applying the Dilution Adjustment to the price at which the OEIC Shares are issued.

The costs payable by the Company in connection with the implementation of the Proposals are expected to be approximately £732,000 (including VAT, where applicable). These costs have been accrued in the Company's net asset value as at close of business on the Latest Practicable Date.

Janus Henderson has agreed to pay any costs of the OEIC Sub-Fund in connection with the Proposals.

Janus Henderson has also agreed to waive the management fee it would otherwise be entitled to on the termination of its management agreement in respect of the assets which are allocated to the OEIC Rollover Pools (the "JHI Partial Fee Waiver"). The amount of the JHI Partial Fee Waiver shall be allocated to the OEIC Rollover Pools in such proportion as represents the relative value of each such OEIC Rollover Pool to the other.

Scheme General Meetings

The Proposals described in this document are conditional, among other things, on Shareholder approval. Notices of the First Scheme GM, to be held at 9.00 a.m. on 21 February 2025 at 201 Bishopsgate, London EC2M 3AE, and the Second Scheme GM, to be held at 9.30 a.m. on 14 March 2025 at 201 Bishopsgate, London EC2M 3AE, are set out in the Circular.

Recommendation

The Board is unanimously of the opinion that the Proposals set out in the Circular are in the best interests of Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of all of the Scheme Resolutions to be proposed at the Scheme General Meetings of the Company and that they complete and return their Forms of Proxy accordingly, whether or not they intend to attend the meetings.

The Directors intend to vote in favour of all of the Scheme Resolutions in respect of their beneficial holdings amounting, in aggregate, to 34,492 Ordinary Shares representing 0.1 per cent. of the Ordinary Shares in issue in the Company as at close of business on the Latest Practicable Date.

The Board cannot, and does not, give any advice or recommendation to Shareholders as to whether, or as to what extent, they should elect for any of the options under the Proposals. The choice between the options available under the Proposals will be a matter for each Shareholder to decide and will be influenced by that Shareholder's individual investment objectives and personal, financial and tax circumstances. Accordingly, Shareholders should, before deciding what action to take, read carefully all the information in this document, in the OEIC Prospectus and the OEIC KIIDS (which are available for download at www.janushenderson.com/en-gb/investor/product/janus-henderson-uk-equity-income-growth-fund).

Interim Dividends

As announced earlier today, the Board has declared a fourth interim dividend in respect of the financial year to 31 October 2024, of 2.6 pence per Ordinary Share (the "Fourth Interim Dividend"). The Fourth Interim Dividend will be paid on 11 March 2025 to Shareholders who are on the Register as at close of business on 21 February 2025. The ex-dividend date for the Fourth Interim Dividend is 20 February 2025.

In relation to the period from 1 November 2024 to 31 January 2025, the Directors have resolved that the Company will pay an interim dividend of 1.5 pence per Ordinary Share ("First Interim Dividend") in order to ensure that the Company meets the distribution requirements to maintain investment trust status during the period from 1 November 2024 to the Winding-up Date. The First Interim Dividend will also be paid on 11 March 2025 to Shareholders who are on the Register as at close of business on 21 February 2025. The ex-dividend date for the First Interim Dividend is 20 February 2025.

Restricted Shareholders

Restricted Shareholders (being Overseas Shareholders and Untraceable Shareholders) will be deemed to have elected for the Cash Option under the Scheme.

It is expected that Untraceable Shareholders will not be able to satisfy the ACD's KYC requirements and, accordingly, will be deemed to have elected for cash pursuant to the Cash Option under the Scheme and shall be entitled to receive payment in cash out of the Cash Pool for their Ordinary Shares.

Expected Timetable

2025

Note: The times and dates set out in the expected timetable of events above and mentioned throughout the Circular may be adjusted by the Company in which event details of the new times and dates will be notified, as requested, to the Financial Conduct Authority, the London Stock Exchange and, where appropriate, Shareholders. All references to time in the Circular are to UK time.

Defined terms used in this announcement shall, unless the context requires otherwise, have the meanings ascribed to them in the Circular.

The Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website at www.hendersonopportunitiestrust.com .

For further information please contact:

Disclaimers

The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. The material contained in this announcement is given as at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment. In particular, any proposals referred to herein are subject to revision and amendment.

The distribution of this announcement in certain jurisdictions may be restricted. Persons into whose possession this announcement comes are required by the Company to inform themselves about and to observe any such restrictions. This announcement does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation.

The OEIC Shares have not been and will not be registered under the Securities Act 1933 of the United States (as amended) ("the 1933 Act"), the United States Investment Company Act of 1940 or the securities laws of any of the states of the United States. The OEIC Shares may not be offered, sold or delivered directly or indirectly in the United States or to the account or benefit of any US Person (being any citizen or resident of the United States of America, its territories and possessions including the State and District of Columbia and all areas subject to its jurisdiction (including the Commonwealth of Puerto Rico), any corporation, trust, partnership or other entity created or organised in or under the laws of the United States of America, any state thereof or any estate or trust the income of which is subject to United States federal income tax, regardless of source and any person falling within the definition of the term "U.S. Person" under Regulation S promulgated under the United States Securities Act of 1933.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "might", "will" or "should" or, in each case, their negative or other variations or similar expressions. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans and objectives, are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. Subject to their respective legal and regulatory obligations, each of the Company and Janus Henderson expressly disclaims any obligations or undertaking to update or revise any forward-looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based unless required to do so by law or any appropriate regulatory authority, including FSMA, the UK Listing Rules, the Prospectus Regulation Rules, the Disclosure Guidance and Transparency Rules, the Prospectus Regulation and MAR.

None of the Company or Janus Henderson, or any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to them, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Each of the Company and Janus Henderson, and their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.