The board of Edinburgh Worldwide (EWI), which was requisitioned by Saba in November, has published an open letter to the US hedge fund requesting it provides shareholders full transparency on its plans for the company ahead of a vote in January.

It comes after Saba published a presentation yesterday (Monday) reiterating its calls for the replacement of EWI’s directors with three of its own US-based nominees.

In it, the US hedge fund slammed EWI’s proposed merger with Baillie Gifford stablemate Baillie Gifford US Growth Trust (USA) and its handling of a sale of part of its stake in SpaceX.

However, it has remained tight-lipped on any further plans for the company if it were to succeed.

EWI’s open letter, addressed to Saba’s founder and chief investment officer Boaz Weinstein, reads:

“The Board of Edinburgh Worldwide Investment Trust (EWIT) is issuing this open letter to request that you provide the Company’s shareholders with full transparency and clarity regarding your demand to remove the Company’s entire independent Board and replace it with your three US-based directors.

“Less than a year ago, you launched a similar campaign seeking to remove the Board and replace it with your own nominees, replace the independent investment manager with Saba, change the investment strategy and pursue a liquidity event. That proposal was overwhelmingly rejected by shareholders who recognised your objectives for what they were – an attempt to take control of the Board in order to pursue your own agenda rather than the long-term interests of EWIT shareholders as a whole.

“Twelve months on, you have launched a substantially similar campaign although this time you have stayed silent on your agenda. We can only assume it is the same as before. As you are aware, our Board has sought to engage constructively with you on numerous occasions. We have proposed a number of credible options that would have provided liquidity and choice for all shareholders. You have rejected every proposal.

“As shareholders consider the resolutions you have put forward, it is both reasonable and necessary that they do so with full disclosure. Against that background, we believe you owe shareholders clear and direct answers to the following questions.

1. In relation to your three proposed director nominees, please confirm:

• If any of the nominees have experience serving on the board of a UK-listed investment trust or other UK listed company.
• The nature of each nominee’s past or present relationship with Saba, including whether they have previously been proposed or acted as representatives of Saba in any capacity.

2. Please explain your intended mandate for the Board if your nominees are elected. In particular:

• Do you intend to change the investment manager (including appointing yourselves)?
• Do you intend to change the Company’s investment strategy?
• Do you intend to allow shareholders a full exit due to the change in strategy?
• Can you confirm that you would not increase the Company’s management fees?  

“On behalf of all shareholders, the Board requests that you provide clear and unambiguous answers to these questions by no later than 5 January so that shareholders may properly assess your proposals and make an informed choice.”

The open letter comes following the publication by Saba on Monday of a presentation reiterating its calls to remove EWI’s six current board members and replace them with Gabi Gliksberg, Michael Joseph, and Jassen Trenkow.

In its announcement, Saba stated that the new nominees “bring the right experience and objectivity to maximise long-term value creation for all shareholders.”

However, it did not provide any details on its plans for the company or specific reasons for the proposed board changes beyond mentioning “the urgent need to replace the company’s board of directors” with individuals “committed to maximising long-term value for all EWI shareholders.”

[QD comment: The very least shareholders should expect ahead of a vote of this magnitude are the intentions of the requisitioning party. Saba’s silence on this is deafening and we would again urge all shareholders to make their vote count and not let Saba in through the back door.]

The vote is on 20 January, but the cut-off for submitting votes is 12:00 noon on Saturday, 17 January and for platforms the date may be as early as 12 January.