Below are comments from retail investors who have voiced opposition to the proposed merger.
This page features comments from retail investors concerning the proposed HICL / TRIG merger. Where consent has been provided, names are shown. In other cases, identities have been withheld and provided only to the Board at the request of the individual.
I do not want to own TRIG assets and strongly oppose your ill thought out plans that destroy shareholder value.
Quoted from correspondence to the Board, Anon
The deal seems only to be in the interests of both sets of directors (who together will create the most unwieldy Board at an investment trust I think I have seen in 50 years of investing) and InfraRed.
Anon
I believe that the transaction is not in the best interests of existing HICL shareholders and raises significant concerns in relation to shareholder value protection & proper corporate governance.
Quoted from correspondence to the Board, Anon
I am dismayed by this lopsided and ill conceived merger with TRIG. I invested in HICL for steady inflation linked income that is low risk in nature. This merger turns the business on its head and completely changes the risk profile of the company. I don’t support it and will vote no.
I think the board of HICL are subject to a conflict of interest with the same investment manager advising both the buyer and seller.
Anon
Small shareholders do not have a voice, but within an action group.. we can make ourselves heard.
Anon
Why I reject the merger proposal:
Potential erosion of shareholder value
By merging with TRIG, the resulting entity risks becoming more closely correlated with broader renewables market cycles (for example, subsidy risk, intermittency risk, merchant risk) rather than retaining HICL’s more defensive infrastructure profile. That evolution may erode the yield stability and capital preservation that attracted me to HICL initially.Mismatch with my investment objectives
I invested in HICL because it offered a low-risk diversification platform, underpinned by high-quality, long-lived infrastructure assets with stable cash flows. The comparatively modest exposure to renewables was part of the appeal. The proposed merger, as communicated in the press release, shifts the combined group’s profile significantly towards large-scale renewables exposure and an altered risk profile. That change is precisely what I do not want as a shareholder.Introduction of assets outside my comfort zone
The communication around the merger indicates that TRIG’s portfolio includes assets I consider to have higher operational and market risk than HICL’s existing portfolio. The implied dilution of the quality of the asset base is unacceptable to me. I believe HICL’s current portfolio is a strength; diluting that by absorbing riskier assets undermines the value proposition I signed up for.Lack of clarity on risk management and governance
Quoted from correspondence to the Board, Anon
The announcement provides insufficient detail (at least in my reading) about how the merged entity will preserve HICL’s existing governance, risk discipline and low-volatility profile. In the absence of strong assurances, I regard this as a material adverse change.
I will be voting against this deal which appears to serve the managers, both boards and the investment bankers rather better than HICL shareholders.
I am sure that you and your Board are familiar with the writings of Warren Buffet but, just in case, I suggest you ask Goldman Sachs what he says about all share combinations of this type. In short, if it goes ahead, you are forcing HICL shareholders to sell 44% of our future revenues from the HICL portfolio to gain 56% of the revenues from TRIG. The recent share price performance of TRIG and the announcement from the government highlight the uncertainties surrounding the to-be-acquired revenues. As CGAM say, if we’d wanted to do this, we could have done so ourselves. The benefits to HICL shareholders from the deal are minimal (0.5p increase in dividend – FTSE100 entry is no guarantee of success: look at Scottish Mortgage’s discount). The market reaction to the deal was entirely predictable but, I imagine, it may have surprised you and your fellow directors.
Quoted from correspondence to the Board, Anon
I will be voting against the merger due to all the reasons which have already been highlighted by others.
I sold out of renewals a few weeks ago (at a loss) and topped up HICL. Now I’m forced back into renewables without wanting to be. The NAV of renewables is too unpredictable and not worth the current risk premium.
Anon
The HICL Board has a fiduciary duty to all HICL shareholders. They can’t sell at what is effectively an undervalue simply because they can get the support of large shareholders who have cross holdings.
Anon