HICL INFRASTRUCTURE (HICL), THE RENEWABLES INFRASTRUCTURE GROUP (TRIG)– Investment trusts
| HICL Price: 110p -6.5% | Market Cap: £2.25bn | Yield: 6.5% |
| TRIG Price: 76.9p | Market Cap: £1.72bn | Yield: 10.5% |
Investment trusts HICL and TRIG have announced a combination to create the UK’s largest listed infrastructure investment company with net assets of more than £5.3 billion.
The groups say their diversified and resilient cash flows will support an initial dividend target of 9p per share and a ‘compelling target NAV total return’ of over 10% per year over the medium term.
The combination will involve the winding-up of TRIG, with the assets transferred to HICL in exchange for new shares, which explains today’s price reaction.
The deal is expected to complete in Q1 2026 with a £350 million ‘liquidity package’ comprising a partial cash option of up to £250 million for TRIG holders plus a £100 million commitment from insurer Sun Life, which has agreed to provide liquidity and secondary market support by buying shares post-completion.
Our View
This deal has probably been in the works for some time as HICL and TRIG have similar assets with a growing focus on renewable energy, and both have struggled with negative investor sentiment as shown by the large and persistent discounts to net asset value which both firms have suffered.
On top of the attractive dividend being offered, merging the two trusts brings greater scale and should bring greater liquidity to the shares including potentially inclusion in the FTSE 100 index, although there is no guarantee the stock won’t continue to trade at a discount to NAV.
Read the press release here: https://www.hicl.com/investors/
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