Infrastructure trusts HICL Infrastructure (HICL) and The Renewables Infrastructure Group (TRIG) have abandoned plans to merge into a ÂŁ5.3bn infrastructure giant, bowing to pressure from a number of HICL shareholders who were unhappy with the deal.
The group, which includes Capital Gearing Trust’s (CGT) manager, CG Asset Management, had argued in a letter to the board that the deal benefited the trusts’ manager, Infrared, as well as TRIG’s shareholders, while HICL’s shareholders were being “left to suffer”.
One of the key concerns was that the two invest in different areas of infrastructure, with HICL’s portfolio of government-backed assets looking more solid than TRIG’s renewable energy portfolio, which has struggled recently.
HICL’s board has now said that “it cannot progress the transaction without a substantial majority of support from its own investors”.
Analysts now expect both boards to consider further M&A options. Winterflood’s Ashley Thomas said this could be within their respective segment of infrastructure, as they look to merge with other portfolios with more similar features. Stifel analysts say they think “this situation may flush out any bidders who had been running a ruler over either company”.
Read more: Why the infrastructure megamerger is on shaky ground
