In what is now the sixth successive defeat for Saba Capital Management in its bid to take control of seven London listed investment companies, shareholders in The European Smaller Companies Trust (ESCT) have voted down Saba’s proposals to remove all of the existing board and replace them with just two of its own representatives, by a very high margin once again.
In what now must feel like Groundhog day for Saba, ESCT shareholders voted by 62.1% to 37.9% against its proposals, with a turnout of 76.9%. Excluding the shares voted by Saba, approximately 99.5% of the votes cast were against the requisitioned resolutions, delivering Saba yet another crushing defeat. It seems to us that, with Saba now having secured the dubious honour of a double hat trick of losses at the general meetings that it requisitioned, there is little doubt that its record attack has turned into a record defeat.
However, we will have to wait until the 14 February when Edinburgh Worldwide (EWI) holds its requisitioned general meeting to find out whether Saba can complete the set and make it seven losses out of seven votes. [Matthew Read: We would also urge shareholders in EWI that, despite the drubbing that Saba has experienced so far, they cannot afford to be at all complacent. Every vote will count and EWI shareholders need to vote in order to make sure that they are not the only trust that succumbs to Saba’s attack. We are clear in our view that Saba’s attack is detrimental to EWI’s shareholders – and you can read more about our thoughts on this here].
Commenting on the result of ESCT’s requisitioned general meeting, the trust’s chairman, James Williams, had this to say:
“Today’s vote is a clear and complete rejection of Saba’s proposals and a resounding endorsement of ESCT’s proven investment strategy, the quality of its independent Board and the manager’s ability to deliver outperformance.
“Our shareholders have spoken loudly and clearly with 99.5% of votes cast by shareholders, other than Saba, voting against the resolutions.
“We are grateful for the overwhelming support from shareholders, which demonstrates confidence in the manager’s ability to continue delivering long-term outperformance. Over 76% of the share capital was voted today and we sincerely thank every investor who took the time to safeguard their Company.
“Saba’s failure to articulate a coherent investment strategy or provide clarity on fees and governance has been a key concern throughout this process. Shareholders have rejected uncertainty in favour of stability, performance, and a strategy that has consistently delivered returns.
“We will continue to focus on generating value for shareholders through disciplined, long-term investment in European smaller companies. The sector is attractively valued, and we are committed to executing our proven investment strategy to identify and invest in high-potential businesses. We hope that, with today’s result, Saba will choose to engage constructively in the best interests of all shareholders.“
