James Carthew: Saba has killed a trust that investors wanted – and for nothing
Saba has strong-armed the end of Edinburgh Worldwide against the wishes of almost all other shareholders, and it may be left with no assets under management to extract fees.
We have reached the point in the Saba saga where it is effectively forcing the dismemberment of Edinburgh Worldwide (EWI) against the wishes of the overwhelming majority of other shareholders.
This depressing state of affairs was brought to you by the guy who launched his assault on our industry with a ludicrous claim (one of many) to be on the side of the ‘mom and pop’ investor.
The structure of EWI’s proposed tender offer is clever, and equitable, because it shuts Saba out of seizing control of EWI’s SpaceX stake, which I have long suspected was one of its chief aims. EWI shareholders will get cash plus the right to receive a share of the cash proceeds of SpaceX’s IPO.
Saba has apparently indicated that it will not tender its shares. That would leave it in charge of a rump trust whose portfolio would be dominated by EWI’s other unlisted investments, including PsiQuantum (quantum computing), Shine Technologies (medical radioisotopes), and Astranis (communications satellites).
No doubt, some EWI shareholders will be loath to lose exposure to businesses such as these. However, if they remain invested, there is every chance that Saba will change the board, appoint itself as manager, perhaps turf out these positions, and use the vehicle to attack other trusts.
Saba’s track record of managing US closed-end funds suggests… read more here