The new Saba-backed board of Edinburgh Worldwide (EWI) has confirmed its intention to offer shareholders an exit through a tender offer once SpaceX has floated this month, but its statement to the stock exchange has failed to dispel concerns over its lack of independence from the activist hedge fund widely thought to want to replace Baillie Gifford as fund manager.
The three-strong board, which 31% shareholder Saba Capital succeeded in electing on 30 April, said it would provide a “liquidity opportunity” for shareholders in the £958m global equities trust “as soon as reasonably practicable”. This would follow the $1.75tn initial public offer of SpaceX on 12 June and the expiry of any lock-up restrictions affecting the company’s 18.9% holding in Elon Musk’s rocket, satellite and AI company.
The three directors, Gabriel Gliksberg, Jassen Trenkow and Michael Joseph, said they were continuing to work closely with fund manager Baillie Gifford regarding the holding in SpaceX.
However, they indicated they were minded to follow the wish of the activist hedge fund’s boss Boaz Weinstein’s for the fund manager to be pursued over the partial sale of SpaceX last year, which he claimed was done to pave the way for a merger with Baillie Gifford US Growth (USA), which Saba blocked.
The board said it was focused on “a review of historic significant portfolio activity and related decision-making processes”.
It is also reviewing governance arrangements and key third-party service providers, which could be a prelude to it appointing Saba as the new fund manager in place of Baillie Gifford.
The company said it was considering appointing new directors as well as seeking to engage with shareholders.
“The board recognises that retail shareholders are an important component of the company’s investor base and will continue to have regard to their interests alongside those of all shareholders when making decisions regarding the future direction of the company,” it said.
Our view
James Carthew, head of investment company research at QuotedData, said: “Given the effort that the new board of Edinburgh Worldwide put into getting elected, it is a bit disappointing that it still hasn’t articulated what it would like the future direction of the trust to be, but the promise of a liquidity opportunity is welcome.”
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