Honeycomb and P2PGI end £1bn merger talks over Woodford concerns

HONEYCOMB Investment Trust and P2P Global Investments (P2PGI) have ended talks over a £1bn merger due to fears over the combined company’s exposure to troubled fund manager Neil Woodford.

Sky News reported that the takeover was proposed by Pollen Street Capital, the manager of both alternative finance-focused investment trusts. It was structured as a takeover of P2PGI by Honeycomb.

Read more: Neil Woodford: It’s not us, it’s you

Objections by Aberdeen Standard Investments and Premier Asset Management were behind the termination of the talks, according to Sky News.

Woodford Investment Management (WIM) holds a 22 per cent stake in Honeycomb and owned 13 per cent of P2PGI until May.

In June, crisis surrounded WIM after Woodford suspended trading in the company’s flagship Woodford Equity Income fund after high levels of investor withdrawals.

Read more: Honeycomb Investment Trust premium under threat from Woodford sell-off 

The fund manager has since offloaded hundreds of millions of pounds worth of holdings in a bid to remove illiquid positions from his portfolio.

The most recent of these was Bristol-based hardware firm Ultrahaptics, in which Woodford held a 20 per cent stake that reportedly sold for “considerable profit”.

It is unclear whether there is any chance of the merger talks being revived.

Pollen Street and WIM declined to comment.