By MIKE SHEEN, This is Money, 7 January 2025:
Keystone Positive Change investors have been urged to vote against takeover proposals from Saba Capital, after the activist hedge fund scuppered the board’s plans for the future of the company.
Keystone Positive Change investment trust had been set to merge with Baillie Gifford Positive Change fund, should investors back its resolutions.
Complicating matters, Keystone then became one of seven investment trusts targeted by activist Saba Capital in an attempted takeover coup.
Keystone says its proposals would allow investors to ‘realise their investment…by way of an uncapped cash exit’, or rollover their investment ‘in a tax-efficient manner; into the Baillie Gifford Positive Change Fund.
But Saba, which has built a stake of 28 per cent of Keystone shares, said it will block this ahead of a vote on its own proposals at a general meeting on 3 February..
Investment manager Baillie Gifford joined criticism of Saba on Tuesday, as it urged shareholders of the US Growth Trust, Keystone Positive Change and Edinburgh Worldwide trusts it manages to vote against the hedge fund..
Under the Keystone plan, shareholders who did not want to move to the open-ended Positive Change fund could sell their stakes at a 1 per cent discount to net asset value..
Carthew suggests investors looking to cash out should consider switching into the open-ended fund and ‘then immediately redeem your units’. This means they will walk away with slightly more than taking the cash.
Whether they ultimately gain more than if they sell out now at a deeper discount depends on market moves over the next couple of weeks.
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