Eve Maddock-Jones, Investment Week, 16 January 2025:
Herald investment trust (HRI) has moved up to a premium after years of running on a discount following rapid buying activity by its biggest shareholder Saba Capital, which is seeking to take over management of the trust next week..
The activist investor launched a takeover campaign against HRI and six other trusts it has a major holding in at the end of last year, predicated on the complaint their boards failed to hold the investment managers accountable for the trusts’ wide discounts to their respective net asset values, and therefore let clients down..
The trust has not been on a premium any time in the past five years alone.
The discount narrowing and share price hitting a premium is a direct result of Saba’s rapid and ‘aggressive’ buying activity in the past few days, as it attempts to increase its odds of winning the vote next week by holding an increasingly larger stake in HRI, analysts explained, and the buying has nothing to do with the cash exit proposition it put forward for the trust..
James Carthew, head of investment companies at QuotedData, said the move was not being done with any view from Saba to try and narrow the discount but rather “trying to force through its agenda”.
“This smacks of desperation on its part as it realises that investors like the existing setup,” he added.
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