Sixth rejection of Saba’s investment trust proposals
Shareholders in The European Smaller Companies Trust voted against proposals to oust the board of directors.
5th February 2025 15:16
by Kyle Caldwell from interactive investor
Six of the seven investment trusts targeted by US activist investor Saba Capital have now voted against proposals to overhaul their boards.
Today (5 February), The European Smaller Companies Trust (LSE:ESCT) held its general meeting on Saba’s proposals. In line with the other five votes, shareholders resoundingly voted against the proposals to “remove all current directors of the trusts”, and “appoint new, highly qualified candidates to replace them”. The meetings were triggered due to Saba owning more than 10% of shares in each trust.
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Of votes cast, The European Smaller Companies Trust recorded 62.1% against the resolutions.
Excluding the votes that Saba cast in favour of its own proposals, only a very small number of shareholders voted in favour of the changes. When stripping out Saba’s votes, The European Smaller Companies Trust had 0.5% support in favour.
In common with the other five votes, turnout was high, with just under 77% casting their votes.
James Williams, chair of The European Smaller Companies Trust, said: “Today’s vote is a clear and complete rejection of Saba’s proposals and a resounding endorsement of ESCT’s proven investment strategy, the quality of its independent board and the manager’s ability to deliver outperformance.
“Our shareholders have spoken loudly and clearly with 99.5% of votes cast by shareholders, other than Saba, voting against the resolutions.
“We are grateful for the overwhelming support from shareholders, which demonstrates confidence in the manager’s ability to continue delivering long-term outperformance. Over 76% of the share capital was voted today and we sincerely thank every investor who took the time to safeguard their company.
“Saba's failure to articulate a coherent investment strategy or provide clarity on fees and governance has been a key concern throughout this process. Shareholders have rejected uncertainty in favour of stability, performance, and a strategy that has consistently delivered returns.”
Both proposals required more than 50% of the votes cast. Boaz Weinstein runs Saba Capital and oversees $5.5 billion (£4.4 billion) in assets at the New York-based hedge fund
If successful, Saba’s longer-term plan was to potentially merge some of the trusts to form a new strategy of purchasing other discounted trusts.
The five other investment trusts where shareholders have voted against Saba’s proposals are Herald (LSE:HRI), Baillie Gifford US Growth (LSE:USA), Keystone Positive Change (LSE:KPC), Henderson Opportunities (LSE:HOT) and CQS Natural Resources Growth & Incomem (LSE:CYN).
There’s one outstanding shareholder vote, which will take place at Edinburgh Worldwide (LSE:EWI) on 14 February. Those interactive investor customers who own shares have until 6.59pm on 10 February to cast their votes.
Our customers can vote via the Voting Mailbox in their online account (under “portfolio” at the top of the page). Our customers also receive notifications through their ii app “voting mailbox” service, which informs them when they are eligible to place a vote.
The European Smaller Companies Trust, one of our Super 60 investment ideas, is currently under review.
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