The proposed £5.3 billion merger between FTSE 250-listed infrastructure investment groups HICL Infrastructure and the Renewables Infrastructure Group Limited (TRIG) has collapsed after failing to win sufficient support from HICL shareholders.
The combination, which would have created one of the largest infrastructure investment trusts in the UK market, has been withdrawn following sustained opposition led by institutional investors sceptical of the valuation and strategic logic of the deal.
HICL’s board confirmed that it was unable to proceed without substantial majority approval, despite insisting that the transaction was based on sound strategic reasoning.
TRIG also acknowledged that shareholders will now not vote on the proposal, bringing an end to months of development work on a trust that was expected to pair social infrastructure assets with a growing renewable portfolio.
Investor objections shift deal dynamics
The proposal had triggered strong resistance from a group of HICL investors, who argued that the merger disproportionately benefited TRIG.
Critics claimed the pricing and structure of the transaction failed to reflect differences in trust valuations, with some suggesting that the terms transferred value away from HICL shareholders.
Among the most vocal opponents was CG Asset Management, which holds nearly 1% of HICL.
In a letter to HICL chairman Mike Bane, the fund manager labelled the merger “appalling” and urged the board to abandon the plan.
These objections were later echoed by major investor M&G, which controls 3.4% of HICL, along with 11 other institutions and the Border to Coast local authority pension scheme.
M&G reportedly told the board that it saw “no strategic nor financial rationale for the combination”, warning that it would vote against the proposal if it went to a ballot.
Market reaction split as firms revert to independent strategy
News of the merger withdrawal prompted a divergent share price response.
HICL’s stock rose nearly 4%, reflecting relief among investors who had opposed the transaction, while TRIG shares declined around 3.8% as expectations for a scale-driven growth model faded.
TRIG chair Richard Morse said the business would now return its focus to a standalone strategy, pointing to the company’s renewables and energy storage portfolio.
“Our focus now returns to delivering TRIG’s attractive standalone strategy. TRIG is a well-established platform with high-quality assets, a competitive pipeline of opportunities, and deep renewables and energy storage expertise,” he said.
“We are uniquely placed to capitalise on the demand growth for low-carbon, reliable power and to capture the commercial opportunities as economies across the UK and Europe electrify and decarbonise. Doing so will allow us to deliver sustainable value and growth for our shareholders, with whom we will continue to engage on the path ahead.”
HICL, which predominantly invests in hospitals, schools, and transport infrastructure, will also continue independently.
Both boards maintained that the merger would have delivered scale, liquidity, and stronger investor relevance, but acknowledged the need to reflect shareholder sentiment.
Alexander Wheeler, analyst at RBC, had anticipated the market response ahead of the announcement, telling clients that the merger was unlikely to progress without stronger backing from HICL investors.
He noted that while the creation of a larger, higher-return combined vehicle carried strategic advantages, the valuation approach had been a sticking point, with an 11% discrepancy in the two trusts’ discounts to NAV proving difficult for shareholders to overlook.
As a result, he said he expected the collapse of the deal to lift HICL shares and weigh on TRIG stock in early trading
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