Investment trusts make final investor pleas ahead of Saba takeover votes
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The boards of The European Smaller Companies Trust and Edinburgh Worldwide have followed investment trust peers in making their final pleas to shareholders to reject proposed takeovers by Saba Capital. Saba last week laid out plans to overhaul and merge up to seven investment trusts it has targeted in a bombshell takeover attempt.
The hedge fund hoping to launch a new strategy targeting London-listed investment companies trading at large discounts to net asset value. Its founder Boaz Weinstein once again criticised boards and management, who he accused of failing shareholders in the wake of disappointing performance and an extended period of high discounts.
The board of The European Smaller Companies Trust on Monday said Saba was guilty of 'deliberate misdirection', by ignoring 'the strong investment performance of the company to advance its own agenda'. The investment trust has outperformed peers in the AIC European Smaller Companies over one, three, five and ten years, adding 18.5, 8, 61.9 and 239 per cent over each timeframe respectively.
Its board says the trust has also outperformed its benchmark over each period since Ollie Beckett took over as portfolio manager in 2011. Saba Capital founder Boaz Weinstein is targeting seven London-listed investment trusts with attempts to replace boards and management.
The trust currently sits on a discount to NAV of around 8.8 per cent, having narrowed significantly from as high as 17 per cent in early 2023. The board also warned investors that Saba 'intends to radically change your company's investment strategy…at a time when the sector is attractively valued'.
