On 12 February 2025, CQS Natural Resources Growth and Income announced the receipt of a requisition served on behalf of Saba Capital Management for a second general meeting of shareholders. Since then, the board has engaged in a series of very constructive discussions with Saba, which has agreed to withdraw the requisition to enable the board and its advisers to complete the strategic review that was outlined in the circular to shareholders dated 7 January 2025. The board will expedite this review and announce the outcome in April 2025.
[QD Comment JC “There is nothing that CQS Natural Resources is doing now that it wasn’t before Saba launched its second attack on the company. Again, Saba is just time wasting and driving up adviser costs at the expense of shareholders”]
[QD comment MR: “We are pleased to see that discussions between Saba Capital and CYN’s board have led to the withdrawal of its second requisition request. We are strongly of the view that Saba’s proposal to open end CYN was not appropriate for the trust’s strategy given the less liquid, but potentially more lucrative, small cap stocks that CYN holds in its portfolio, which would just not be suitable for an open-ended strategy.
CYN shareholders would lose this ability along with the other advantages of closed end funds – such as being able to gear, having an independent board to protect shareholders interests (including holding the manager to account), being able to vote at company meetings, which are important factors in why closed end funds tend to outperform equivalent open-ended funds over the long term.
We hope that a constructive way can be found through this as Saba’s attacks have just been wasting other shareholders’ time – its first set of proposals were not only emphatically rejected by CYN shareholders but by shareholders in all seven trusts that it attacked – and driving up costs for the fund. Saba’s second requisition was also entirely unnecessary at this time as the board has been very vocal in advertising that it is in the process of conducting a far-reaching strategic review.”]
Christopher Casey, Chairman, said: “We are pleased to have reached this constructive way forward with the team at Saba and to focus on achieving an outcome in the best interests of all shareholders.”
As previously stated, the board and its advisers are currently reviewing the following options:
- Maintaining the current investment policy and management arrangements, given the best practice annual continuation vote, together with providing liquidity to shareholders by means of buybacks, tenders and other similar actions;
- Introducing an increased dividend, to be funded in part by capital growth;
- Pursuing further discount management mechanisms;
- Providing a full cash exit at NAV for all shareholders; and
If a suitable partner can be identified, to negotiate terms of a combination with another investment trust or open-ended investment company that would provide an ongoing investment opportunity with a natural resources and energy focus, together with the option of a full cash exit at NAV for all shareholders.
CYN: CQS Natural Resources Growth and Income announce Saba have withdrawn second requisition notice
