Document re:EGM

Henderson Strata Investments PLC
21 December 2006

21 December 2006



Henderson Strata Investments plc



Bonus Issue of Subscription Shares, Reduction of Capital and Extraordinary
General Meeting





INTRODUCTION



On 24 November 2006 the Company announced certain proposals which consist of a
change of the Company's investment objective to provide Shareholders with higher
than average growth of capital over the medium to long term; the appointment of
James Henderson to be the individual fund manager with primary responsibility
for the portfolio (the 'portfolio manager'); changes in the management fee
arrangements; a change of name; an amendment to the Articles of Association to
remove the discount realisation mechanism; and a bonus issue of long-dated
Subscription Shares.  The Company also proposes to implement a share capital
reduction in order to facilitate the future payment of dividends.



The Company has today published a Prospectus to explain the reasons for the
proposals and explain why the Directors recommend that Shareholders vote in
favour of the Resolutions to be proposed at the Extraordinary General Meeting,
which will be held on 19 January 2007 (the 'EGM').  Terms used in this
announcement shall have the same meaning as those set out in the Prospectus.



BACKGROUND TO AND REASONS FOR THE PROPOSALS



The Company's current investment objective is to seek to achieve capital growth
from investment in UK listed micro cap securities.  The Company adopted this
investment objective in February 2005 and the subsequent realignment of the
Company's portfolio in accordance with this objective was substantially
completed by 30 April 2005.  The individual who currently has primary
responsibility for managing the Company's portfolio is Colin Hughes, an employee
of Henderson Global Investors Limited.



The Company's share price has increased by 50.7% over the period from 22
December 2004 (the date on which the proposals for the Company's current
investment objective were announced) to 31 October 2006.  The total return of
the FTSE All-Share Index over the same period was 39.5% (source: FundData).



The Company's Net Asset Value per share on a total return basis has increased by
37.3% over the period from 1 May 2005 to 31 October 2006 which compares with the
total return of the Company's current benchmark, the FTSE Fledgling Index (ex
investment companies), of 25.3% over the same period (source: FundData).  This
represents out-performance of 12% against the benchmark.  The total return of
the FTSE All-Share Index over this period was 37.3%.



The Company has sought over time to implement a discount control policy by
regularly repurchasing shares.  These share repurchases ensured that the average
discount to Net Asset Value over the ninety days prior to the Company's
financial year end on 31 October 2006 was less than 8%.



Despite achieving the Company's discount control objective and the
out-performance of the current portfolio manager, Colin Hughes, against the
performance benchmark, the Board has been advised that there is insufficient
demand from investors to sustain the discount at this 8% level over the medium
term, particularly at a time when many other smaller company focused investment
companies are trading at greater discounts to Net Asset Value than the Company.



In the light of this and the ongoing demand for share repurchases by the
Company, the Board has concluded that it is unlikely that the Company, in its
current form, will be able to remain of a sufficient size for its continuation,
given the fixed element of its expenses, to be in the interests of Shareholders.
  There is, however, no intention of recommending that the Company be put into
liquidation if the Proposals are not approved (and thus not implemented).



CHANGE OF INVESTMENT OBJECTIVE AND INVESTMENT STRATEGY



Investment objective



If the relevant Resolution is approved at the EGM, the Company will have James
Henderson, who joined Henderson Global Investors in 1984 and is currently a
member of the Value and Income team, as its portfolio manager.  The Company will
invest in a portfolio of predominantly UK companies that the portfolio manager
believes to be undervalued by the market.  The Company's policy will be to
invest in a concentrated portfolio of shares on an unconstrained basis across
the whole range of market capitalisations.  The investment portfolio will be
characterised by its focus on growth, recovery and 'special opportunities'
company shares which the portfolio manager believes should achieve a higher than
average rate of capital growth over the medium to long term.



James has an opportunistic and value driven stock-picking investment style.  He
has primary responsibility for the portfolio of Lowland Investment Company plc
('Lowland'), a company in the UK Growth and Income sector of the AIC, which has
had net asset value performance on a total return basis of 727.6% since he took
on this role in March 1990, 297.9% better than its benchmark (source: FundData),
and which was ranked 1st in its sector over the 3, 5 and 10 calendar years to 31
October 2006 (source: FundData).  As at close of business on 15 December 2006,
Lowland's share price stood at a 1.6% premium to net asset value.  He is also
the individual with primary responsibility for the investment portfolio of The
Law Debenture Corporation plc.  Law Debenture has produced net asset value
performance on a total return basis of 104.4% since he took over responsibility
in June 2003, which is 20.5% better than its benchmark (source: FundData).





Revised benchmark and AIC sector



If the Resolutions are approved at the EGM, the Company will change its
benchmark from the FTSE Fledgling Index to the FTSE All-Share Index and will
apply to the AIC to change its classification from the UK Smaller Companies
sector to the UK Capital Growth sector of the AIC.



Revised investment management fee



If the relevant Resolution is approved at the EGM, the investment management fee
will be changed so that the annual management fee is reduced from 0.85% to 0.6%
of the first £100 million of the Company's gross assets and 0.5% of any excess
above £100 million.  In addition, the Board will introduce a performance fee
equal to 15% of any out-performance over the benchmark (being the FTSE All-Share
Index) on a NAV total return fully diluted basis, subject to a cap on the total
fees of 1.65% of net assets in any year.  No performance fee will be payable if
the Company's share price or Net Asset Value is lower at the end of an
accounting period than it was at the beginning.  Any underperformance against
the benchmark will be carried forward, with any unrewarded outperformance also
carried forward (but only available to set-off against future underperformance).




Dividend policy and reduction of capital



The expectation is that the Company's initial portfolio will produce a
relatively low dividend yield, notwithstanding the proposed change in investment
objective, and that sums available for distribution to Shareholders will be
modest.  The Company allocated 80% of its management fees and finance costs to
capital and 20% to revenue for the year ended 31 October 2006 and intends to
maintain this going forward.  The Board nevertheless considers that the ability
to pay dividends and other distributions from the Company's net income is
important and is thus proposing that the existing deficit in revenue reserves of
£1,957,933 at 31 October 2006 should be eliminated by a reduction of the
Company's share premium account by the same amount.  Such a reduction requires,
amongst other matters, the approval of a Special Resolution and the sanction of
the Court.  A suitable Special Resolution will be proposed at the EGM and, if
passed, the Company will apply to the Court to sanction this reduction, which it
is expected would become effective, following Court approval, on or about 14
February 2007.



Gearing policy



The Articles of Association limit the power of the Company to borrow up to two
times the Adjusted Capital and Reserves (as defined therein).  The Company's
current gearing policy is that borrowings shall not exceed 20 per cent. of the
value of the Company's total net assets.  The Company has no long term
borrowings but the Board considers that if the Manager is of the view that
investment prospects justify borrowing to make further investments, the Company
should have the ability to use gearing up to a limit of 25% of net assets.
Accordingly, if the relevant Resolution is approved at the EGM, the Company's
gearing policy will be that borrowings shall not exceed 25 per cent. of net
assets.  The Company's borrowings are expected to be provided by way of flexible
banking facilities.



SPECIAL OPPORTUNITIES



James Henderson's investment approach is both value orientated and contrarian.
He will seek to identify 'special opportunities' - that is to say, undervalued
companies that have fallen out of favour with investors.  Although the following
is not an exclusive list, the stocks that James selects are likely to fall in
one or more of the following categories:



•        Recoveries - Companies that have performed poorly but where there are
early signs of improvement, potentially leading to a restructuring or sale.



•        Unrecognised growth - Growth companies selling on relatively low
valuations but with growth potential that has not yet been generally recognised.



•        Corporate potential - Companies that have an above average chance of
being taken over in the medium term, which factor is not reflected in the
valuation.



the Subscription Share issue



In conjunction with the Company's proposed change of investment objective, the
Directors also propose to implement a bonus issue of long-dated Subscription
Shares.  Shareholders on the register at 19 January 2007 will receive 1
Subscription Share for every 5 Ordinary Shares then held.  Each Subscription
Share will confer a right, exercisable by notice to the Company in the thirty
days preceding the annual general meeting in any of the years 2009 to 2014
(inclusive), to convert, on the date of the relevant annual general meeting,
into 1 Ordinary Share of the Company.



The Directors consider that the Subscription Share issue should have the
following advantages for Shareholders:



•        The current favourable market background for the UK market stocks and
the potential for the strong performance of the Company's assets should result
in the Subscription Shares having a financial value on issue.



•        The Subscription Shares have the same characteristics as warrants but
with the additional benefit of being qualifying investments for the purposes of
an existing PEP and for the stocks and shares component of an ISA (whereas
warrants are not).



The trading value of the Subscription Shares will be determined by market
forces, including the global macroeconomic background, the supply and demand for
the Subscription Shares and investor sentiment towards the Company and the UK
Growth sector of the AIC.  The Subscription Shares will have time or 'option'
value - that is to say, a value for the time the underlying Ordinary Share has
the potential to rise above the Conversion Price (as defined below).



Entitlement of Shareholders to Subscription Shares



Subject to the proposed bonus issue of long-dated Subscription Shares being
approved by passing the requisite Resolution at the EGM, Shareholders will each
receive 1 Subscription Share for every 5 Ordinary Shares owned by them as at the
close of business on 19 January 2007.  Fractions of Subscription Shares arising
from the calculation of each Ordinary Shareholder's entitlement will not be
allotted or issued and the number of Subscription Shares allotted to each
Ordinary Shareholder will be rounded down to the nearest whole Subscription
Share.  The proposed issue of Subscription Shares will not be underwritten.



Terms of the Subscription Shares



In summary, the Subscription Shares being issued will entitle a holder to elect
to convert, by notifying the Company in the thirty days preceding the annual
general meeting in any of the years 2009 to 2014 (inclusive), each Subscription
Share into one Ordinary Share on the date of the relevant annual general meeting
at the Conversion Price.  The 'Conversion Price' will be the Net Asset Value per
Ordinary Share as at 18 January 2007, plus a 20 percentage premium of such
amount.



For illustrative purposes only, the published unaudited Net Asset Value per
Ordinary Share (on a capital basis) as at 15 December 2006 was 750.8 pence, and
had this Net Asset Value per Ordinary Share been used (and adjusted to 747.2
pence to take account of current year net income and the costs of the bonus
issue), the Conversion Price would have been 897 pence.



The Conversion Price will be notified to Shareholders by way of a supplementary
prospectus expected to be published on 19 January 2007.



To exercise their conversion rights, Subscription Shareholders must notify the
Company during the thirty days preceding the annual general meeting in any of
the years 2009 to 2014 (inclusive).  The conversion date will be the date of the
relevant annual general meeting.



The issue of the Subscription Shares is subject to the passing of the relevant
Resolution at the EGM authorising the Directors to allot the Subscription
Shares, the UK Listing Authority agreeing to admit the Subscription Shares to
the Official List and the London Stock Exchange agreeing to admit the
Subscription Shares to trading.  If the conditions are satisfied, the Directors
intend to exercise the authority conferred by the Resolution to allot the
Subscription Shares.  If any of these conditions are not fulfilled, then the
Subscription Shares will not be issued.



It is expected that the Subscription Shares will be admitted to the Official
List on 22 January 2007 and that the first day of dealings in the Subscription
Shares will be on the same date.  The Subscription Shares will be issued in
either certificated or uncertificated form.  The ISIN number for the
Subscription Shares will be GB00B1JLN010.



SHARE BUYBACKS AND LIFE OF THE COMPANY



Following the annual general meeting held on 9 February 2006, the Company had
the authority to buy back up to 1,627,526 Ordinary Shares by way of market
purchases at prices not exceeding 105 per cent. of the average of the middle
market quotations as derived from the daily Official List for the five business
days immediately preceding the date of purchase and otherwise in accordance with
the Listing Rules. This authority was fully utilised and subsequently renewed at
the extraordinary general meeting held on 4 October 2006 where the Company was
granted the power to buy back up to 1,383,560 Ordinary Shares of which 1,021,595
had been utilised by 15 December 2006 (being the latest practicable date prior
to publication of this document). The current authority will expire at the next
annual general meeting, which has been convened for 15 February 2007. At that
annual general meeting the Board proposes to seek renewal of this authority to
repurchase 14.99 per cent. of the Ordinary Shares in issue at the date of the
meeting.



The Company is proposing to take similar powers to buy back up to 14.99 per
cent. of the Subscription Shares on the basis described above and the necessary
authority from Shareholders is included in a Resolution to be proposed at the
Extraordinary General Meeting.



The Company will be including a continuation vote in the agenda for the annual
general meeting to be held in 2008 (and, if passed, at every third subsequent
annual general meeting) and will continue to employ share buy back and share
issuance powers with a view to being active in enhancing returns for
Shareholders, including by repurchasing shares on an opportunistic basis.
However, in the circumstances, and in particular the proposed change of
investment objective and the change of portfolio manager, the Board has decided
to recommend the removal of the discount realisation mechanism (which requires
the Board to provide realisation proposals if the discount to NAV is more than
8% over the last 90 days of each financial year). This will require an amendment
to the Articles of Association, which requires the approval of a Special
Resolution of the Ordinary Shareholders and such a resolution will accordingly
be proposed as a Special Resolution at the EGM.



Consequences of the CONVERSION of Subscription Shares on the Company



In general, it is anticipated that the Subscription Shareholders will exercise
their conversion rights if the market price of Ordinary Shares exceeds the
Conversion Price at the final conversion date and may do so if similar
circumstances prevail at an earlier conversion date.  If the Net Asset Value per
Ordinary Share at the relevant time exceeds the Conversion Price, the Company
will issue Ordinary Shares (pursuant to the conversion of the Subscription
Shares) on receipt of a sum equal to the Conversion Price, which will be below
the Net Asset Value per Ordinary Share at that date.  If the Conversion Price is
materially below the Net Asset Value per Ordinary Share then the issue of
Ordinary Shares pursuant to the conversion of the Subscription Shares would have
a material dilutive effect on the Net Asset Value per Ordinary Share.



CHANGE OF NAME



As part of the revised investment objective, the Board is proposing that the
name of the Company be changed to Henderson Opportunities Trust plc.  This
requires the approval of a Special Resolution and the necessary authority from
Shareholders is included in the agenda for the EGM.



Costs of the ProposalS



The Company's expenses in connection with the Proposals, including the proposed
issue of Subscription Shares, are estimated to amount to £500,000 (inclusive of
VAT).  Henderson Global Investors Limited has undertaken to contribute £100,000
of these costs.  The Board is proposing to charge the balance to the Company's
revenue account.





Extraordinary General Meeting



The implementation of the Proposals, to include the issue of the Subscription
Shares, requires the approval of Shareholders.  Accordingly, an Extraordinary
General Meeting has been convened for 19 January 2007 at which three Resolutions
will be proposed as Special Resolutions.  Resolution 1 will approve the proposed
change of investment objective, the change in investment management fee, the
proposed change of name and sanction the proposed issue of Subscription Shares.
Resolution 2 will approve the amendment of the Articles of Association to remove
the requirement to bring forward proposals to remove the Discount Realisation
Mechanism.  Resolution 3 will approve the proposed reduction of capital (which
will require the sanction of the court prior to implementation).  Resolution 2
is conditional on Resolution 1 being passed.



Timetable


Event                                                                                                  2007

Latest time and date for receipt of Voting Instruction Forms from Plan Participants         5:00 p.m. on 12
                                                                                                    January

Latest time and date for receipt of Forms of Proxy from Shareholders                       10:30 a.m. on 17
                                                                                                    January

Conversion price of Subscription Shares calculated as at                               close of business on
                                                                                                 18 January

Extraordinary General Meeting                                                                 10:30 a.m. on
                                                                                                 19 January

Record date for issue of bonus Subscription Shares                                     close of business on
                                                                                                 19 January

Supplementary prospectus stating Subscription Share conversion price published                   19 January

Date from which revised investment objective and change of name becomes effective                22 January

Date on which Subscription Shares issued and admitted to the Official List                     8:00 a.m. on
                                                                                                 22 January

Dealings in Subscription Shares commence on London Stock Exchange                              8:00 a.m. on
                                                                                                 22 January

Subscription Shares issued in uncertificated form credited to stock accounts in CREST          8:00 a.m. on
of Shareholders entitled thereto                                                                 22 January
Subscription Share certificates and supplementary prospectus stating Subscription             by 26 January
Share conversion price posted to non-CREST Shareholders

Court hearing of petition to sanction reduction of capital                                      14 February

Annual General Meeting                                                                      2:00 p.m. on 15
                                                                                                   February



Enquiries


Peter May, Director, Henderson Strata Investments plc 020 7818 4469

James de Sausmerez, James Henderson, Henderson Global 020 7818 1818
Investors

Angus Gordon Lennox                                   020 7588 2828

JPMorgan Cazenove Limited




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