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Highlights
- HICL and TRIG to merge via TRIG’s reconstruction and voluntary wind-up, creating a GBP 5.3bn infrastructure platform.
- TRIG shareholders to receive new HICL shares on a formula asset value basis, with a GBP 250m cash exit option.
- Combined Company to target 9.0p annual dividend and medium-term NAV total return above 10% per year.
HICL Infrastructure PLC (HICL) and The Renewables Infrastructure Group Limited (LSE:TRIG) have agreed detailed terms for a merger that will create the UK’s largest listed infrastructure investment company. The Combined Company will have net assets exceeding GBP 5.3 billion, with an expanded mandate covering both traditional core infrastructure and renewables-focused assets. Completion is targeted for the first quarter of 2026, subject to approvals.
HICL and TRIG Agree Landmark Merger
Following engagement with major shareholders and detailed negotiations, HICL and TRIG have reached heads of terms to combine their portfolios into a single enlarged entity. The Combined Company aims to offer greater market relevance, increased scale and access to a wider pool of assets across the infrastructure spectrum, including core public-private assets, energy transition projects and digital infrastructure.
At completion, HICL shareholders are expected to hold approximately 56% of the merged entity, with TRIG shareholders holding around 44%, assuming full take-up of the cash option.
Funding Structure and Exchange Terms
FAV-for-FAV Share Exchange
New HICL shares will be issued to TRIG shareholders based on a formula asset value exchange ratio derived from both companies’ 30 September 2025 NAVs. The illustrative exchange ratio equals 0.714173 HICL shares per TRIG share, subject to final NAV confirmation.
Partial Cash Option and Liquidity Support
TRIG shareholders will be able to elect a partial cash exit of up to GBP 250 million, priced at a 10% discount to TRIG’s 30 September 2025 NAV per share, adjusted for dividends and buybacks thereafter. In addition, Sun Life has agreed to provide GBP 100 million of liquidity support through the purchase of ordinary shares in the Combined Company following completion.
Dividend and Return Targets
Both companies will continue to pay quarterly dividends until completion, including TRIG’s previously declared interim dividend. Following the merger, quarterly dividends under the Combined Company are expected to correspond to an annual rate of 9.0 pence per share, with a targeted medium-term NAV total return of more than 10% per annum.
Integrated Management and Operations Structure
Continuation of Investment and Renewables Management
InfraRed Capital Partners will continue as Investment Manager, with a revised fee structure aligned to the larger asset base. Renewable Energy Systems (RES) will become operations manager for the renewables portfolio within the Combined Company under a new agreement with updated fees and aligned termination terms.
Revised management arrangements and expected cost efficiencies are forecast to deliver an Operating Expense Ratio of 92–96bps.
Approvals and Expected Timeline
The merger requires shareholder approval, FCA approval for HICL’s prospectus and new investment policy, regulatory clearances and project-level consents. Documentation is expected to be sent to shareholders later this week, with general meetings planned for December 2025. Completion is targeted for Q1 2026.
