Home Money Herald Investment Trust shareholders vote AGAINST Saba acquisition

Herald Investment Trust shareholders vote AGAINST Saba acquisition

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Defeated: Saba founder Boaz Weinstein loses first of seven shareholder votes on proposals to take control of London-listed investment trusts
  • Herald was the first of seven trusts to face a vote on Saba takeover proposals

the board of Herald Investment Trust has claimed victory over Saba Capital after shareholders rejected the hedge fund’s attempt to take control of the company.

Herald was the first of seven London-listed investment trusts approached by Saba Capital to see the hedge fund’s proposals put to a shareholder vote.

In a show of shareholder democracy, investors turned out in droves to vote, and many of them did so through proxy voting or their investment platforms.

More than 65 percent of total votes cast and a majority of total voting rights rejected eight Saba proposals at a meeting Wednesday, despite the City’s concern that low voter turnout could seal the vote. in favor of the hedge fund.

Saba, which has been accumulating substantial stakes in each of the trusts, is proposing to remove the board and management with plans to then take control of each function.

Only 0.15 percent of votes cast by non-Saba shareholders voted in favor of the resolutions, which the Herald’s board described as “a damning criticism of Saba’s proposals by the company’s shareholders that They are not Saba.”

Defeated: Saba founder Boaz Weinstein loses first of seven shareholder votes on proposals to take control of London-listed investment trusts

Saba had criticized Herald’s board for failing to sufficiently address a persistently large discount to net asset value, while manager Katie Potts’ performance came under particularly strong criticism from the hedge fund’s founder, Boaz Weinstein.

Proxy advisers Glass Lewis and ISS had urged Herald shareholders to back the trust’s board.

Saba’s plans for the investment trusts are to merge “some or all” of the funds into a new discount-trading trust investment strategy.

Herald chairman Andrew Joy said the vote provided “a clear, complete and incontrovertible rebuttal of Saba’s attempt to take control” of the trust and “change its strategy against the wishes and interests of its non-Saba shareholders.” “.

He added: “It is perfectly clear that the reason Saba’s proposals were rejected is that they were intended to lead to an outcome, namely Saba running Herald, in which the existing shareholders were simply not interested.

‘The reason shareholders invested and continue to invest in Herald is for long-term capital appreciation by investing in smaller technology companies, and they do not want to be deprived of the opportunity to enjoy more of the same. They did not invest in Herald to be part of a short-term business strategy.’

Joy said the saga “has already cost shareholders money, which unfortunately we cannot recover from Saba.”

He added: ‘We look forward to collaborating with our shareholders, including Saba, now that our shareholders have voted resoundingly in favor of the Board and, by extension, the mandate and the Manager.

‘The Board will follow the advice of our advisors on next steps. “Shareholders have voted overwhelmingly in favor of continuing with what has been a unique and highly successful strategy, and we look forward to continuing to discuss future developments with them.”

The next London-listed fund to be put to a vote on Saba’s proposals is Baillie Gifford US Growth on February 3.

Broker Peel Hunt has highlighted 21 Saba-owned investment trusts potentially vulnerable to similar actions.

Asset management giant BlackRock revealed on Wednesday that it had reached an agreement with Saba to avoid such action.

This is Money has contacted Saba for comment.

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