JP Morgan Global Growth & Income (JGGI) is set to take on the assets of the £329m Henderson International Income Trust (HINT), after the two trusts’ boards agreed heads of terms on a possible merger.
If shareholders back the combination, it will create an enlarged JGGI with around £3.4bn assets.
As part of the deal, it is expected that one board member from HINT will join the JGGI board.
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The two trusts are aiming to put the deal to shareholders at general meetings in May and June. If approved, the merger is expected to complete by July.
JGGI currently trades at a 1.35% premium, while HINT shares lag the trust’s NAV by 11.07% according to the Association of Investment Companies (AIC).
Reacting to the merger, QuotedData senior analyst Matthew Read said that the announcement doesn’t feel like much of a surprise, with JGGI seeming to be the merger partner of choice for funds with global income mandates.
“Ordinarily, we would like to have seen HINT shareholders given the option of a cash exit in the event that they didn’t want to swap into JGGI,” he said.
“However, with JGGI consistently trading at a small premium, existing HINT shareholders who don’t want to remain invested would still be better off taking JGGI shares and selling them in the market, which suggests take up of a cash exit would likely be low and probably wouldn’t justify the increased legal costs offering this would incur.”
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