Keystone Positive Change (KPC) has announced that it is relaunching its plans to liquidate the trust – offering shareholders the option of a cash exit at a 1% discount to the residual NAV or the opportunity to rollover into the Baillie Gifford Positive Change Fund (click here to see our coverage of the original proposals), following shareholders resoundingly rejecting proposals from Saba Capital to take over the management of the fund at the requisitioned general meeting on 3 February 2025 (click here to read more).
KPC’s board says that it has re-engaged with a number of major shareholders to seek support for the scheme and that it “has received unanimous indications of support for the resolutions necessary” to implement it. KPC therefore intends to publish a circular reconvening the ordinary shareholders’ class meeting, the first general meeting and the second general meeting, which are all required to implement the scheme as soon as practicable.
The expected timetable indicates the ordinary shareholders class meeting and first general meetings will be held on 17 March, shares suspended from trading on 18 March, second general meeting on 28 March with new BGPC shares issued the same day, and cheques despatched for preference shareholders and ordinary shareholders that have opted for the cash exit week commencing 7 April.
[QD comment by Matthew Read: Although the announcement from Keystone Positive Change doesn’t say it explicitly, reading between the lines, we think that Saba Capital has decided to support KPC’s board’s proposals, which we believe should allow Saba to book a decent profit on its position even after opting for the cash exit at a 1% discount to NAV.
This is based on the observation that wind up resolutions require a majority of 75% to pass and that, when Saba last announced the size of its KPC holding – 28.0% of KPC’s voting rights on 7 January 2025 – it appears to us that it has enough shares to block the board’s proposals. This would apply even if all other shareholders turned up and voted for the scheme.
While we think that it is in Saba’s interests to support the scheme, and doing so seems likely an easy win as it can close off its holding in KPC at a profit and then focus its attention on managing its holdings in the other funds it has targeted, we think it is worth acknowledging that, if it has indeed given its blessing to the board privately, it has done the right thing by not attempting to trap fellow shareholders in a strategy they want to exit and cause them to potentially incur further costs.”
Comments from Karen Brade, chair of Keystone Positive Change
“We are pleased to offer the existing Scheme in line with the wishes of shareholders as a whole. The Scheme offers an uncapped cash exit or a rollover into a fund with a similar strategy. We remain confident that this is in the interest of all shareholders.
“Meetings to approve and implement the Scheme will be reconvened with the aim of distributing cash in April to shareholders who opt for the cash exit.
“Shareholders who have already voted and made elections in respect of the Scheme need take no further action. Those who have yet to vote are encouraged to do so.
Once again, I would like to thank shareholders for their support and engagement.”
