Impax Environmental Markets (IEM) has followed Edinburgh Worldwide (EWI) in formally launching its 100% tender offer, urging shareholders to vote for and use the exit at net asset value (NAV) to avoid become trapped in a fund controlled by 22.1% holder Saba.
Saba, the US activist hedge fund that yesterday forced Edinburgh Worldwide to fall on its sword and provide shareholders with an escape route, failed to sell its shares in the conditional tender offer provided by IEM last month. That had to be cancelled and replaced with a second tender which will be put forward as an ordinary resolution at a general meeting on 16 April. That requires 50% of shareholder votes to pass compared to the 75% support the previous conditional tender, as a special resolution, required, making it harder for Saba to block.
Chair Glen Suarez said Saba refused to sell its shares despite the offer of a “substantial financial contribution” from Impax Asset Management to all shareholders, although he did not say if this included the stamp duty payment Saba had demanded.
“Having exhausted every reasonable alternative and having received no guidance from Saba as to its voting or tendering position, the board has been forced to act to protect non-Saba shareholders from the possibility of becoming trapped in a Saba-controlled company where Saba could have the power to change the strategy, objectives, and even the mandate. Consequently, the board is unanimously recommending that shareholders vote in favour of the exit tender offer which offers all shareholders an exit from the company at close to NAV,” said Suarez.
He said the directors would tender all their shares, “underscoring our conviction that this is the right outcome for IEM’s shareholders.”
IEM has published a circular with the blue and yellow proxy forms shareholders can use to vote in the next month.
To vote on the proposed tender offer at the 16 April meeting, shareholders should return the blue form by 11am on 14 April.
If the exit tender offer is approved, shareholders should return the yellow form if they wish to sell any, or all, their shares by 1pm on 17 April. The results of this will be published on 21 April with the tender price and payment date to be announced by the end of May.
Deadlines for investment platforms and share-dealing websites may be as early as 10 April, it said.
Meanwhile, Impax Asset Management is encouraging IEM shareholders to switch into the £257m open-ended Impax Environmental Markets fund. It has cut the annual management charge on its “Z” shares from 0.81% to 0.65%.
Our view
James Carthew, head of investment company research at QuotedData, said: “The situations at Impax Environmental Markets and Edinburgh Worldwide are identical. Saba, through its intransigence and determination to ride roughshod over the wishes of other shareholders, has brought about the end of a unique trust. In my view, IEM shareholders should vote in favour of the tender and tender all their shares. The likely alternative is Saba seizing control, appointing itself manager (probably on a higher fee if the charges on its ETF are anything to go by), and changing the mandate. There is no obvious listed fund to switch into. So, in this case, the best solution for those that believe in IEM’s strategy, might be to take a look at Impax’s open-ended fund.”
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