Henderson EuroTrust : Recommended proposals for a merger with Henderson European Focus Trust plc and Notices of General Meetings

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IT CONTAINS PROPOSALS RELATING TO THE RECONSTRUCTION AND MEMBERS' VOLUNTARY WINDING-UP OF HENDERSON EUROTRUST PLC ON WHICH YOU ARE BEING ASKED TO VOTE AND IN RELATION TO WHICH SHAREHOLDERS HAVE THE RIGHT TO MAKE AN ELECTION. IF YOU ARE IN ANY DOUBT ABOUT THE ACTION TO BE TAKEN, YOU ARE RECOMMENDED TO SEEK YOUR OWN PERSONAL FINANCIAL ADVICE FROM AN APPROPRIATELY QUALIFIED INDEPENDENT ADVISER AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 IF YOU ARE IN THE UNITED KINGDOM, OR FROM ANOTHER APPROPRIATELY AUTHORISED INDEPENDENT FINANCIAL ADVISER IF YOU ARE IN A TERRITORY OUTSIDE OF THE UNITED KINGDOM, WITHOUT DELAY.

If you have sold or otherwise transferred all of your Ordinary Shares in Henderson EuroTrust plc (the "Company" or "HNE"), you should pass this document, together with the accompanying documents (but not any accompanying personalised Forms of Proxy or Form of Election), as soon as possible to the purchaser or transferee or to the person through whom the sale or transfer was effected for transmission to the purchaser or transferee. However, the related prospectus published by Henderson European Focus Trust plc (the "HEFT Prospectus") should not be forwarded to or transmitted in or into any Overseas Jurisdiction. Shareholders who are resident in, or citizens of, territories outside the United Kingdom should read the section headed "Excluded Shareholders" in Part 2 of this document.

The New HEFT Shares are not and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act"), and the New HEFT Shares may not be offered, sold, pledged or otherwise transferred within the United States, or to or for the benefit of "U.S. persons" as defined in Regulation S under the US Securities Act ("US Persons") except pursuant to an exemption from the registration requirements of the US Securities Act. Additionally, HEFT is not, and does not intend to be, registered as an investment company under the US Investment Company Act of 1940, as amended (the "US Investment Company Act"), and HEFT Shareholders are not, and will not be, entitled to the benefits of the US Investment Company Act. No issuance, offer, purchase, sale or transfer of New HEFT Shares may be made except in a manner which would not require HEFT to register under the US Investment Company Act. There has been and will be no public offer of the New HEFT Shares in the United States.

In connection with the Scheme, US Persons which are existing holders of shares in the Company ("US Shareholders") are requested (where applicable) to execute the US Investor Representation Letter annexed to the HEFT Prospectus and return it to HEFT in accordance with the instructions printed thereon.

Deutsche Numis is authorised and regulated in the United Kingdom by the FCA and is advising the Company and no one else in connection with the Proposals (whether or not a recipient of this document). Deutsche Numis will not be responsible to any person other than the Company for providing the protections afforded to its customers, nor for providing advice in relation to the Proposals, the contents of this document and the accompanying documents or any other matter referred to herein or therein.

The definitions used in this document are set out in Part 7 of this document.

HENDERSON EUROTRUST PLC

(Incorporated in England and Wales with registered number 02718241 and registered as an

investment company under section 833 of the Companies Act 2006)

Recommended proposals for a merger with Henderson European Focus Trust plc

and

Notices of General Meetings

This document should be read in conjunction with the HEFT Prospectus relating to Henderson European Focus Trust plc ("HEFT") which has been prepared in accordance with the Prospectus Regulation Rules, approved by the Financial Conduct Authority in accordance with section 84 of the Financial Services and Markets Act 2000, and made available to the public in accordance with the Prospectus Regulation Rules. In relation to HEFT this document is not a prospectus and does not constitute an offer of any securities for sale or subscription. Investors should not subscribe for any New HEFT Shares referred to in this document except on the basis of information provided in the HEFT Prospectus. The HEFT Prospectus is available on HEFT's website www.hendersoneuropeanfocus.com. A short document which includes some "Frequently asked questions" is available on the Company's website at: www.hendersoneurotrust.com. The website will not be available to Overseas Shareholders.

The Proposals described in this document are conditional, among other things, on Shareholder approval. Notices of the First General Meeting, to be held at 11.30 a.m. on 20 June 2024, and the Second General Meeting, to be held at 9.30 a.m. on 4 July 2024, in each case at the offices of Janus Henderson Investors, 201 Bishopsgate, London, EC2M 3AE, are set out at the end of this document.

All Shareholders are encouraged to vote in favour of the Resolutions to be proposed at the General Meetings and, if their Shares are not held directly, to arrange for their nominee to vote on their behalf. Forms of Proxy for use in conjunction with the General Meetings are enclosed. To be valid for use at the General Meetings,

the Forms of Proxy must be completed and returned in accordance with the instructions printed thereon to the receiving agent, Computershare Investor Services PLC (the "Receiving Agent") at The Pavilions, Bridgwater Road, Bristol, BS99 6AH as soon as possible, but in any event so as to be received no later than 48 hours (excluding non-working days) before the time of the relevant meeting. Alternatively, you may appoint a proxy or proxies electronically by visiting www.investorcentre.co.uk/eproxyand following the instructions. Proxies submitted via www.investorcentre.co.uk/eproxymust be transmitted so as to be received by the Receiving Agent no later than 48 hours (excluding non-working days) before the time of the relevant meeting.

Shareholders who hold their Shares in uncertificated form (i.e. in CREST) may vote using the CREST electronic voting service in accordance with the procedures set out in the CREST Manual (please also refer to the accompanying notes to the notices of the General Meetings set out at the end of this document). Proxies submitted via CREST for the General Meetings must be transmitted so as to be received by the Receiving Agent as soon as possible and, in any event, no later than 48 hours (excluding non-working days) before the time of the relevant meeting.

Shareholders who hold Shares in certificated form will also find enclosed with this document a Form of Election for use in connection with the Proposals. To be valid, Forms of Election must be completed and returned to the Receiving Agent, Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH so as to arrive as soon as possible and, in any event, not later than 1.00 p.m. on 27 June 2024. Shareholders who hold their Shares in uncertificated form will not receive a Form of Election and should elect in accordance with the instructions contained in the section of this document titled "Shares held in uncertificated form (that is, in CREST)", which can be found in Part 2 of this document.

Neither the United States Securities and Exchange Commission (the "SEC") nor any securities supervisory authority of any state or other jurisdiction in the United States has approved or disapproved the Scheme or reviewed it for its fairness, nor have the contents of this document or any other documentation relating to the Scheme been reviewed for accuracy, completeness or fairness by the SEC or any securities supervisory authority in the United States. Any representation to the contrary is a criminal offence in the United States.

The Scheme is being implemented subject to United Kingdom disclosure requirements which are different from certain United States disclosure requirements. In addition, US Shareholders should be aware that this document has been prepared in accordance with a UK format and style, which differs from the US format and style. In particular, parts of this document contain information concerning the Scheme required by UK disclosure requirements which may be material and may not have been summarised elsewhere in the document. Furthermore, the Scheme will be subject to other procedural requirements, including with respect to withdrawal rights, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and law.

US Shareholders should note that the New HEFT Shares are not, and will not be listed on a US securities exchange and HEFT is not subject to the periodic reporting requirements of the United States Securities and Exchange Act of 1934, as amended (the "US Exchange Act") and is not required to, and does not, file any reports with the SEC. The Scheme is not subject to the disclosure and other procedural requirements of Regulation 14D under the US Exchange Act.

The Scheme may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other tax laws. Each US Shareholder is urged to consult their independent professional adviser immediately regarding the tax consequences of making a decision regarding the Scheme.

It may be difficult for US Shareholders to enforce their rights and any claim arising out of the US federal securities laws, since HEFT is located in a foreign country, and all of its officers and directors are citizens and residents of jurisdictions outside the United States. US Shareholders may not be able to sue a foreign company or its officers or directors in a foreign court for violations of US securities laws. Further, it may be difficult to compel a foreign company and its affiliates to subject themselves to a US court's judgement. Whether located in the United States or elsewhere, US Shareholders will receive any cash consideration in Pounds sterling.

Dated 20 May 2024

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	Contents
SUMMARY OF ACTION TO BE TAKEN BY SHAREHOLDERS	4
EXPECTED TIMETABLE	6
PART 1 LETTER FROM THE CHAIR	7
PART 2 FURTHER DETAILS OF THE PROPOSALS	16
PART 3	THE SCHEME	23
PART 4	RISK FACTORS	31
PART 5 FURTHER INFORMATION ON HEFT AND THE COMBINED TRUST	34
PART 6	ADDITIONAL INFORMATION	39
PART 7	DEFINITIONS	41
NOTICE OF FIRST GENERAL MEETING	48
NOTICE OF SECOND GENERAL MEETING	53

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SUMMARY OF ACTION TO BE TAKEN BY SHAREHOLDERS

Full details of the action to be taken by Shareholders are set out in the section of Part 1 of this document titled "Action to be taken by Shareholders" which can be found on pages 13 and 14 of this document, the section of Part 2 of this document titled "Elections", and in the instructions on the Forms of Proxy, the Form of Election, and the US Investor Representation Letter (as applicable). You should read this whole document when deciding what action to take. The attention of Excluded Shareholders is drawn to the section headed "Excluded Shareholders" in Part 2 of this document.

TO VOTE ON THE PROPOSALS

Complete and return the PINK Form of Proxy for the First General Meeting so as to be received as soon as possible, but in any event no later than 11.30 a.m. on 18 June 2024.

		AND
		Complete and return the GREEN Form of Proxy for the
		Second General Meeting so as to be received as soon as
		possible,	but	in	any	event no	later	than 9.30	a.m. on
		2 July 2024.
		OR
		Alternatively	you	may appoint a proxy or proxies
To vote on the		electronically	by	submitting	via	www.investorcentre.co.uk/
Proposals		eproxy.	Proxies	submitted	via	www.investorcentre.co.uk/
		eproxy must be transmitted so as to be received by the
		Registrars no later than 48 hours (excluding non-working
		days) before the time of the relevant General Meeting.
		OR
		Shareholders who hold their Shares in uncertificated form
		(i.e. in CREST) may vote using the CREST electronic voting
		service in accordance with the procedures set out in the
		CREST Manual. Proxies submitted via CREST for the
		General Meetings must be transmitted so as to be received
		by the	Registrars	no later	than	48 hours	(excluding

non-working days) before the time of the relevant General Meeting.

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TO MAKE AN ELECTION

To elect to rollover into HEFT (the "Rollover Option") in full

To elect for the Cash Option

(limited in aggregate to 15 per cent. of the issued Shares)

No Form of Election should be completed or TTE Instruction submitted. However, Shareholders should nevertheless vote on the Proposals, as set out above.

If you hold your Shares in certificated form (that is, not in CREST):

you MUST complete the accompanying Form of Election in accordance with the instructions contained therein so as to be received as soon as possible, but in any event no later than 1.00 p.m. on 27 June 2024.

OR

If you hold your Shares in uncertificated form (that is, in

CREST)

you MUST send a TTE Instruction in respect of any Shares for which you wish to make an Election for the Cash Option no later than 1.00 p.m. on 27 June 2024.

If you have any questions relating to the completion and return of your Forms of Proxy and/or the Form of Election, please contact the Receiving Agent's Shareholder Helpline between 8.30 a.m. and 5.30 p.m. (UK time) Monday to Friday (except public holidays in England and Wales) on [phone]. Network providers' costs may vary. Calls to the Shareholder Helpline from outside the UK will be charged at the applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. The Shareholder Helpline can only provide information regarding the completion of Forms of Proxy and/or the Form of Election and cannot provide you with financial, tax, investment or legal advice.

Only Shareholders who hold Shares as at 6.00 p.m. on 27 June 2024 are able to elect for the Cash Option in respect of those Shares. The extent to which a Shareholder elects for the Cash Option is a matter for each Shareholder to decide, and will be influenced by their own individual financial and tax circumstances and investment objectives. Shareholders should seek advice from their own independent financial adviser.

Excluded Shareholders

To the extent that an Excluded Shareholder would otherwise receive New HEFT Shares under the Scheme, either because no Election, or a partial Election, for the Cash Option was made or because an Excess Application for the Cash Option is scaled back in accordance with the Scheme, then such New HEFT Shares will be sold by the Liquidators in the market and the net proceeds paid to the relevant Excluded Shareholder in accordance with paragraph 15.1 of Part 3.

IF YOU ARE NOT AN EXCLUDED SHAREHOLDER AND YOU WISH TO RECEIVE NEW HEFT SHARES IN RESPECT OF YOUR ENTIRE HOLDING OF SHARES IN THE COMPANY, YOU NEED TAKE NO ACTION AND DO NOT NEED TO COMPLETE THE FORM OF ELECTION OR SEND A TTE (TRANSFER TO ESCROW) INSTRUCTION. HOWEVER, SHAREHOLDERS SHOULD NEVERTHELESS VOTE ON THE PROPOSALS, AS SET OUT ABOVE.

5

EXPECTED TIMETABLE

	2024
Ex dividend date for the pre-liquidation interim dividend to	30 May
Shareholders
Record date for the pre-liquidation interim dividend to	31 May
Shareholders
Latest time and date for receipt of proxy appointments in respect	11.30 a.m. on 18 June
of the First General Meeting
Pre-liquidation interim dividend paid to Shareholders	19 June
First General Meeting	11.30 a.m. on 20 June
Latest time and date for receipt of Forms of Election and TTE	1.00 p.m. on 27 June
Instructions
Record date for entitlements under the Scheme	6.00 p.m. on 27 June
Calculation Date	close of business on 27 June
Ordinary Shares disabled in CREST (for settlement)	close of business on 27 June
Latest time and date for receipt of proxy appointments in respect	9.30 a.m. on 2 July
of the Second General Meeting
Reclassification of the Ordinary Shares	8.00 a.m. on 3 July
Suspension of listing of Reclassified Shares	7.30 a.m. on 4 July
Second General Meeting	9.30 a.m. on 4 July
Effective Date for implementation of the Scheme	4 July
Announcement of the results of Elections, the HNE Rollover FAV	4 July
per Share, the HNE Cash FAV per Share and the HEFT FAV per
Share
CREST accounts credited with, and dealings commence in, New	8.00 a.m. on 5 July
HEFT Shares
Cheques and electronic payments despatched to Shareholders	week commencing 8 July
who elect for the Cash Option and CREST accounts credited with
cash
Certificates despatched in respect of New HEFT Shares	by 18 July
Cancellation of listing of Reclassified Shares	as soon as practicable
	after the Effective Date

Note: All references to time in this document are to UK time. Each of the times and dates in the above expected timetable (other than in relation to the General Meetings) may be extended or brought forward. If any of the above times and/or dates change, the revised time(s) and/or date(s) will be notified to Shareholders by an announcement through a Regulatory Information Service.

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PART 1

LETTER FROM THE CHAIR

HENDERSON EUROTRUST PLC

(the "Company")

(Incorporated in England and Wales with registered number 02718241 and registered as an

investment company under section 833 of the Companies Act 2006)

Directors:	Registered Office:
Nicola Ralston (Chairman)	201 Bishopsgate
Stephen King	London
Rutger Koopmans	EC2M 3AE
Ekaterina (Katya) Thomson
Stephen White
	20 May 2024

Dear Shareholders

Recommended proposals for a merger with Henderson European Focus Trust plc

1 Introduction

On 14 March 2024 the Board announced that it had agreed heads of terms with Henderson European Focus Trust plc ("HEFT") in respect of a proposed merger of the Company with HEFT to form an enlarged, flagship, European investment trust (the "Combined Trust") to be managed by the European equities team at Janus Henderson Investors. The Combined Trust is intended to be renamed Henderson European Trust plc. The Board announced updated and enhanced agreed terms of the proposed merger on 14 May 2024, following an unsolicited third party approach to the Company, negotiations by the Board seeking to optimise the outcome for Shareholders, and a consultation with certain major Shareholders who were unanimously supportive.

The Combined Trust will be co-managed by Jamie Ross and Tom O'Hara, currently lead and co- lead portfolio managers of HNE and HEFT, respectively. The Combined Trust will bring together their respective expertise and proven track records of benchmark outperformance under a single mandate: to maximise total return by investing in companies predominantly listed in Europe (excluding the UK). Its focus will be on Europe's "global champions" - large, established and well- managed businesses operating internationally but based in Europe. The Combined Trust expects to hold a concentrated list of stocks, selected with no particular style bias but with an emphasis on the potential for long-term growth in the context of enduring global trends.

The merger will be effected by way of a scheme of reconstruction and members' voluntary winding up of the Company under section 110 of the Insolvency Act (the "Scheme") and the issue of New HEFT Shares to Shareholders who are deemed to have elected to roll over their investment into the Combined Trust (the "Proposals").

The recommended Proposals have been structured with a view to avoiding any costs of change falling on continuing shareholders in the Combined Trust, and to reduce the overall ongoing charges ratio of the Combined Trust. This will be achieved through a contribution to costs from Janus Henderson to support the Scheme when the recommended Proposals become effective. In addition, the AIFM has agreed to reduce the management fees payable by the Combined Trust and to waive the termination fees that would otherwise be payable by HNE to the AIFM.

The purpose of this document is to explain the Proposals and their rationale and expected benefits, the actions required to be taken in order for them to be implemented, and to convene the General Meetings to seek the required Shareholder approvals. The expected timetable associated with the Proposals is provided on page 6 of this document.

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2 Overview of the Proposals

Under the Proposals, which are conditional upon, amongst other things, the approval of Shareholders:

1. all Shareholders will be entitled to elect to receive cash in respect of some or all of their Shares (subject to an overall limit of 15 per cent. of the Shares in issue at the Calculation Date, excluding treasury shares) (the "Cash Option"); and
2. eligible Shareholders will by default receive New HEFT Shares (the "Rollover Option") to the extent that they do not make a valid election for the Cash Option in respect of all of their Shares or to the extent that their elections for the Cash Option are scaled back in accordance with the Scheme.

The Cash Option will be priced at a 2 per cent. discount (the "Cash Option Discount") to a formula asset value. This formula asset value will represent the proportion of the Residual Net Asset Value attributable to those Shares in respect of which valid elections have been made for the Cash Option (following any required scaling back in accordance with the Scheme), such amount in aggregate being the "Cash Pool". The "HNE Cash FAV per Share" shall be equal to the value of the Cash Pool divided by the number of Shares validly elected for the Cash Option (following any required scaling back in accordance with the Scheme). The value arising from the application of the Cash Option Discount will be allocated to the Rollover Pool. The value of the Rollover Pool shall be equal to the Residual Net Asset Value less the value of the Cash Pool, plus HNE's portion of the Janus Henderson Contribution to the extent required to ensure that the Proposals are cost-neutral for continuing shareholders in the Combined Trust (as described in paragraph 7 below). The "HNE Rollover FAV per Share" shall be equal to the value of the Rollover Pool divided by the number of Shares elected for the Rollover Option.

The choice between the options available under the Proposals will be a matter for each Shareholder to decide and will be influenced by their investment objectives and by their personal, financial and tax circumstances. Accordingly, Shareholders should, before making any Election, read carefully all the information in this document and in the HEFT Prospectus. Summary information on HEFT (and the Combined Trust) is set out below and in Part 5 of this document. The HEFT Prospectus should be read alongside, but does not form part of, this document. A short document which includes some "Frequently asked questions" is available on the Company's website at: www.hendersoneurotrust.com.

3 Benefits of the Proposals

The Directors believe that the Proposals will have the following benefits for Shareholders:

•

•

•

A compelling investment case: The Rollover Option will provide Shareholders with exposure to the Combined Trust, a flagship Europe excluding UK equities proposition, seeking to maximise total return from a portfolio of the Investment Manager's assessment of Europe's biggest and best companies, selected according to long-standing global trends and with an emphasis on substantial, well-managed businesses, with sustainable business models.

Demonstrable track record of strong performance: HNE's NAV total return over three, five and ten years to 30 April 2024 has been 13.1 per cent., 59.8 per cent. and 155.5 per cent. respectively. HEFT's NAV total return over three, five and ten years to 30 April 2024 has been 30.6 per cent., 74.8 per cent., and 164.8 per cent. respectively.

A "best ideas" approach: The Combined Trust will be managed by Jamie Ross, who has managed HNE's portfolio since 2019, and Tom O'Hara, who has co-managed HEFT's portfolio since 2020. The portfolio managers have their own distinct and proven expertise but share a fundamental investment philosophy. Working collaboratively from an enhanced knowledge base, and with the benefit of increased discussion throughout the stock picking process, it is expected that the Combined Trust will represent the very best ideas of both portfolio managers.

• Continuity of manager and excellent European equities team: The Combined Trust will be supported by Janus Henderson's award-winning European equities team which encompasses 11 team members and conducts around 1,300 company meetings a year.

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•

•

•

•

•

•

•

•

•

Continuity of exposure: HEFT and HNE have over 50 per cent. of common holdings by value and the majority of the Combined Trust's portfolio is expected to comprise assets currently held by at least one of the companies. This complementarity of holdings and style will reduce the extent of any portfolio realignment required in connection with the Scheme.

Increased scale: As a result of the Proposals, the Combined Trust is anticipated to have net assets of approximately £680 million (based on valuations as at 30 April 2024) and, assuming full take up of the Cash Option and the HEFT Tender Offer, would become the second largest investment company in the AIC European sector. It is also expected to be eligible for inclusion in the FTSE 250 Index1. The enhanced scale of the Combined Trust should improve secondary market liquidity, as well as raise the profile and help marketability.

Reduced management fees for the Combined Trust: The Combined Trust will benefit from improved management fee terms, with management fees to be charged on the following basis: 0.600% per annum of the Net Asset Value up to, but excluding, £500 million; 0.475% per annum of the Net Asset Value equal to and in excess of £500 million and up to, but excluding, £1 billion; and 0.450% per annum of the Net Asset Value equal to and in excess of £1 billion. This compares with the current structure of both HNE and HEFT of 0.65% per annum of the Net Asset Value up to £300 million and 0.55% per annum of the Net Asset Value in excess of £300 million.

Reduced OCR: The Scheme is expected to reduce fixed costs proportionately and, along with the reduced management fees, produce a competitive OCR for the Combined Trust estimated to be approximately 0.70 per cent.2 compared to HNE's current OCR of 0.79 per cent. and HEFT's of 0.80 per cent.

Contribution from Janus Henderson to the costs of the Proposals: The AIFM has committed to make a contribution of £1,550,000 to the costs of the Proposals, to ensure the Proposals will be cost-neutral for continuing shareholders in the Combined Trust, and with any surplus being available for the benefit of continuing shareholders in the Combined Trust.

Discount/premium management policy: The Combined Trust will introduce a five-yearly conditional performance related tender offer and will also use share buybacks and share issuance where appropriate and subject to prevailing market conditions. In addition, the board of the Combined Trust will consider, at its discretion, subject to normal market conditions and no earlier than after an initial three-year period, whether it would be in the long-term interests of shareholders as a whole to be offered additional opportunities to realise some of their investment in the Combined Trust.

Gearing: The Combined Trust expects to deploy strategically both the longer-term structural and short-term gearing currently in place in HEFT, with the benefit of inexpensive long-term gearing of €35 million over 25 to 30 years (weighted average cost of 1.57 per cent.) and short-term gearing in the form of an overdraft.

Experienced board: The Combined Trust's board will include directors of both HNE and HEFT ensuring continuity and collective competence and experience.

Opportunity for cash exit: The Proposals include a cash exit opportunity of up to 15 per cent. of the Company's shares in issue, providing all Shareholders with the ability to realise part of their investment at the HNE Cash FAV per Share.

4 Summary information on HEFT and the Combined Trust

HEFT is a closed-ended investment company incorporated in England and Wales on 20 January 1947. It is an investment company as defined by section 833 of the Companies Act and operates as an investment trust within the meaning of Chapter 4 of Part 24 of the Corporation Tax Act 2010.

Janus Henderson Fund Management UK Limited (the "AIFM") will continue to be appointed as alternative investment fund manager to the Combined Trust. The AIFM delegates the provision of investment management services to Janus Henderson Investors, a global asset management firm

1. Index eligibility subject to subsequent market movements and FTSE eligibility review.
2. This figure is an estimate, which is subject to change. The actual OCR will depend on subsequent movements in costs and net assets.

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which, together with its affiliates, has over £250 billion under management. The AIFM manages 11 investment trusts.

The Combined Trust's investment objective and investment policy are proposed to be amended in connection with the Scheme, as set out in Part 5 of this document and in the HEFT Prospectus.

The board of the Combined Trust will comprise seven directors drawn from HEFT and HNE. It is expected that Stephen King, Rutger Koopmans and Katya Thomson will join the HEFT Board on completion of the Scheme, and that the size of the Combined Trust's board will reduce to five directors over the following two years as those directors with the longest tenure step off the board.

Prior to the Scheme, HEFT is putting forward a tender offer to HEFT Shareholders for up to 15 per cent. of the HEFT Shares in issue, excluding treasury shares (the "HEFT Tender Offer"), which broadly reflects the Cash Option being offered to Shareholders under the Scheme. The HEFT Tender Offer will be priced at a 2 per cent. discount (the "HEFT Tender Offer Discount") to HEFT's NAV per share after adjusting for the costs of the Proposals and less SDRT and any incidental fees and commissions specific to the HEFT Tender Offer. Following the Scheme, the Combined Trust will introduce a performance-related conditional tender offer to be made to shareholders for up to 25 per cent. of the Combined Trust's outstanding share capital (excluding treasury shares), at NAV less costs and less a discount of 2 per cent. if, over the five years to 30 September 2029, the Combined Trust's NAV per share total return does not equal or exceed the total return of the benchmark (the FTSE World Europe (Ex UK) Index).

Please note that neither the Board (other than Stephen King, Rutger Koopmans and Katya Thomson, in each case in their capacity as a prospective director of HEFT) nor the Company takes any responsibility for the contents of the HEFT Prospectus. The HEFT Board takes no responsibility for the content of this document.

5 Conditions of the Proposals

Implementation of the Proposals is subject to a number of conditions, including:

1. the recommendation of the boards of the Company and HEFT to proceed with the Proposals which may be withdrawn at any time;
2. the passing of the Resolutions and any conditions of such Resolutions being fulfilled;
3. the HEFT Share Allotment Authority being approved by HEFT Shareholders and not having been revoked or superseded; and
4. the approval of the Financial Conduct Authority and the London Stock Exchange of the Admission of the New HEFT Shares to the premium segment of the Official List and to trading on the Main Market, respectively.

If any condition is not satisfied, the Proposals will not become effective, the Company will not proceed with the winding-up and instead will continue in existence. In these circumstances, the Directors will reassess the options available to the Company at that time.

6 Scheme mechanics and entitlements under the Scheme

Under the Scheme:

1. all Shareholders will be entitled to elect to receive cash in respect of some or all of their Shares (the "Cash Option"). The maximum number of Shares (in aggregate) that can be elected for the Cash Option is 15 per cent. of the total number of Shares in issue (excluding Shares held in treasury) as at the Calculation Date. Shareholders are entitled to elect for the Cash Option in respect of more than 15 per cent. of their individual holdings of Shares (the "Basic Entitlement", such excess amount being an "Excess Application"). However, if aggregate Elections are made for the Cash Option which exceed 15 per cent. of the issued Shares (excluding Shares held in treasury) as at the Calculation Date, Shareholders who have made an Election for the Cash Option in excess of their Basic Entitlement shall have their Excess Applications scaled back in a manner which is, as near as practicable, pari passu and pro rata among all Shareholders who have made such Excess Applications; and

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