HICL and TRIG Scrap Billions Merger After Shareholder Revolt

HICL Infrastructure has abandoned a £5.3 billion merger with The Renewables Infrastructure Group after encountering decisive opposition from shareholders. The deal, intended to create the United Kingdoms largest listed infrastructure investment trust, was brought to an abrupt halt following the intervention of influential investors representing more than 13 percent of HICL’s equity.

The company chair maintained HICL is not for sale in the wake of the terminated deal, stating that the business will continue as a standalone entity. Under current regulations, any credible offer will always be considered in the interest of shareholders. This assurance followed a modest rally in HICL’s share price, reflecting renewed speculation about the company’s future prospects.

The primary objection was rooted in concerns over the potential exposure of HICL shareholders to the higher volatility of TRIG’s renewables portfolio. Prior to the deal proposal, both companies endured substantial discounts against their net asset values: HICL at 24 percent and TRIG at 34 percent. Shareholders also resisted what they perceived as a transfer of value due to the larger discount applied to TRIG assets. Many were averse to an unwanted repositioning of their investments into a fundamentally different asset class.

Opposition grew as CG Asset Management brought together institutional and retail investors to campaign against the merger. Support was eventually bolstered by M and G with a 3.4 percent stake. A letter outlining the groups dissent attracted around 200 retail investors, reinforcing the resistance to the proposed combination.

Despite attempts by the HICL board to address concerns with revised terms, no solution acceptable to both sides could be achieved. The board concluded it would not proceed without broad shareholder backing, having gauged insufficient support among major investors.

Advisers from leading investment banks had expected considerable fees from the merger process, but the cancellation means only a fraction will be distributed. While analysts suggest the failed merger might draw acquisition interest to HICL or motivate the search for new partners, the board has reaffirmed its confidence in HICL’s current strategy and its attraction as a standalone company. Both HICL and TRIG intend to pursue their existing business models while seeking to address their discounted market valuations.