Investment trust merger abandoned after shareholder revolt
Controversial plan collapses in the face of opposition from minority investors.
1st December 2025 10:53
by Dave Baxter from interactive investor
HICL Infrastructure PLC Ord (LSE:HICL) and Renewables Infrastructure Grp (LSE:TRIG) have abandoned their controversial merger plan following opposition from shareholders.
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“Both boards remain convinced of the strategic rationale for the combination. However, following broad engagement with shareholders, the HICL board determined that it cannot progress the transaction without a substantial majority of support from its own investors,” HICL said in a statement.
“Each company remains well positioned as an independent business, with high-quality portfolios, strong management teams, and clear strategies for delivering long-term value to investors.”
The trusts unveiled their plans to merge two weeks ago, arguing that it would create a more diversified fund with greater scale, and that it had a “positive market sounding with large shareholders of both companies”.
However, the deal has met with substantial opposition from smaller investors.
The news immediately caused HICL shares to slide, while TRIG shares rose, and investors argued that they did not want to combine two different infrastructure subsectors in one fund.
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The deal also drew criticism for the fact that it would allow the same investment manager to keep both funds, and that all board members would retain their jobs.
Pressure ramped up when a group of HICL shareholders, which Winterflood cited as having a 13% stake in HICL, banded together against the deal last week.
Next steps
Winterflood analyst Ashley Thomas suggested that HICL shares could now recover to their pre-deal announcement level of 115.7p, while TRIG shares could slide back down.
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Importantly, TRIG once again faces a continuation vote next year, while neither trust is immune from the prospect of further corporate activity.
“Given many of the benefits of the proposed HICL/TRIG combination related to increased scale, we would expect both boards to continue to consider consolidation opportunities – albeit HICL investor preference may well be within the core/core plus infrastructure segment (e.g. consolidation with a vehicle with similar assets/characteristics such as International Public Partnerships Ord (LSE:INPP)),” said Thomas.
“TRIG may seek to consolidate the more fragmented renewable sector, where as well as scale, the diversification of technology and geographic risk could reduce volatility/risk.
“Given TRIG’s dividend per share was expected to be reduced by around 15% under the combination proposal, there may also be increased focus on this fund’s future dividend policy.”
QuotedData head of investment companies James Carthew warned that the failed merger could result in other names seeking to absorb HICL and TRIG.
“As I said at the outset, I believe both companies will be attracting attention from third parties in the wake of this,” he said.
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