(Dec 30): Boaz Weinstein’s Saba Capital Management pressed investors in a London-listed fund run by Baillie Gifford to oust board members, putting more pressure on shareholders ahead of a January vote.
Saba released a presentation Monday (Dec 29) detailing its opposition to a proposed merger between Edinburgh Worldwide Investment Trust plc and Baillie Gifford US Growth Trust plc, criticising the sale of some SpaceX shares “at a price massively lower than SpaceX’s reported US$1.5 trillion (RM6.08 trillion) IPO valuation.”
The board said in a statement on Dec 17 that it would “strongly urge” shareholders to vote against Saba’s proposed resolutions and said the company has made “strong progress”.
“Despite this significant progress, an aggressive US hedge fund wants to remove the entire board and replace it with its own three US nominees in another attempt to seize control for its own commercial advantage, at the expense of other shareholders,” Chair Jonathan Simpson-Dent said in the statement.
Weinstein’s hedge fund, which manages about US$6 billion, began waging a high-profile campaign late last year to take control of seven UK trusts trading at a discount. Those attempts failed, though some of the targeted trusts have gone on to make the structural changes that Saba sought anyway. In November, Saba renewed its push to get shareholders to replace the board at Edinburgh Worldwide — less than a year after a similar measure was voted down.
In a separate open letter on Tuesday, Simpson-Dent pressed Saba for more clarity on its renewed campaign, such as whether Saba intends to change the investment manager, the strategy, management fees and allow shareholders a full exit. He also asked if Saba’s nominees for the board had experience running a UK-listed company. Simpson-Dent asked for answers by Jan 5, so shareholders can assess the proposals before the vote on Jan 20.
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Saba’s similar proposal less than a year ago “was overwhelmingly rejected by shareholders who recognised your objectives for what they were — an attempt to take control of the board in order to pursue your own agenda rather than the long-term interests of EWIT shareholders as a whole,” Simpson-Dent wrote.
Weinstein said in Monday’s statement that he disagreed with this view. “After five years of massive value destruction and a continued refusal to publicly confront Baillie Gifford’s recent mishandling of EWI’s SpaceX holding, there is no world in which Mr Simpson-Dent or any member of this board can accurately claim they are committed to maximising value for shareholders.”
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