Edinburgh Worldwide (EWI) has repeated its call for shareholders to approve a 100% exit and to sell their shares in the ensuing tender offer, warning that Saba Capital is poised to seize control at next month’s annual general meeting.
Explaining its decision last week to launch a 100% tender offer that is likely to bring an end to the 28-year-old investment trust, the board of Edinburgh Worldwide said it was necessary to prevent Saba, an activist hedge fund with a 31% stake, from succeeding in getting its representatives elected at the AGM in April.
Saba has filed resolutions for a third attempt to oust EWI’s board following which it has indicated it will seek to replace Baillie Gifford as fund manager. This will end the £775m trust’s successful policy of investing in global technology companies and see it become an activist vehicle holding stakes in other investment companies like its new active ETF in Dublin.
Although shareholders have rejected Saba’s previous two attempts in February last year and last month, the New York firm is betting that it will succeed in pushing its block vote over the 50% level needed to remove the current non-executive directors. Its share of the vote last month jumped to 46.8% from 36.2% the year before, putting it in spitting distance of its target.
Chair Jonathan Simpson-Dent said: “The tender offer we are proposing is carefully timed to pre-empt the high probability of a change of control in the coming weeks that would take your company down a very different path. Our detailed analysis concludes that Saba is likely to succeed in imposing its new board at the company’s AGM which has to be held before the end of April. Shareholders must ask themselves – is this the future you want for your investment?”
EWI said shareholders wanting to exit the investment trust before Saba takes control must vote for the tender offer by 2pm on 8 April and then tender their shares by 1pm on 16 April.
The board advised that some investment platform deadlines may be as early as 20 March. The message came as it published a circular detailing the 100% sales opportunity that the independent directors want shareholders to take.
QuotedData regretfully agrees with the board’s decision. Senior analyst Matthew Read explained why in an article on Friday.
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