Herald shareholders vote down Saba proposals

Shareholders in the Herald Investment Trust (LON:HRIL) have today voted against Saba Capital’s proposals to remove the trust’s current board.

A total of 26.4 million votes – 65% of total votes cast – were against Saba’s requisitioned resolutions, which sought to replace the investment trust’s leadership with its own appointees.

Herald is the first of seven trusts with which Saba has requisitioned general meetings to vote on its proposals.

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"Today non-Saba shareholders have almost unanimously rejected Saba's self-interested proposals,” said Andrew Joy, chairman of Herald. “The fact that 99.78% of all votes cast by non-Saba shareholders were voted against Saba’s resolutions and in favour of the existing Board provides a clear, complete and incontrovertible rebuttal of Saba’s attempt to take control of your company and change its strategy against the wishes and interests of its non-Saba shareholders.

“I would like to thank all Herald’s shareholders, both large and small, for their support. I very much regret that this episode has already cost shareholders money, which unfortunately we cannot reclaim from Saba. We look forward to engaging with our shareholders, including Saba, now that our shareholders have voted resoundingly in favour of the Board and by extension, the mandate and the Manager,” he added.

Richard Stone, chief executive of the Association of Investment Companies (AIC), said “It’s very encouraging to see Herald shareholders turn out to vote in such numbers. This is a victory for shareholder democracy.”

Saba Capital, and chief investment officer Boaz Weinstein, have insisted that their activities have already benefited shareholders of the trusts in question.

Saba’s BlackRock resolution

The result will come as a blow to Saba, which many industry observers had accused of hoping to exploit voter apathy in order to assume control of Herald and the other six investment trusts.

That just relates to Saba’s ambitions in London. In the US, it has pursued similar campaigns against ten close-ended funds managed by BlackRock.

Eight of the funds voted against Saba’s proposed candidates to join their boards in Spring 2024, and yesterday announced a settlement with two (the BlackRock Innovation and Growth Term Trust (NYSE: BIGZ) and the BlackRock Health Sciences Term Trust (NYSE: BMEZ)) that will see the funds make tender offers for 50% and 40% of their shares, respectively, at 99.5% of net asset value (NAV) per share.

The tender offers are expected to commence on March 21, 2025, in the case of BMEZ, and on June 9, 2025, in the case of BIGZ, and will close 20 business days later.

When are the other six trusts voting?

Management of the other six UK trusts will hope that their shareholders will follow Herald’s example – a view shared with the AIC.

“There are six other trusts with votes just around the corner,” said Stone. “It’s vital that all shareholders vote on the future of their investment trust. Shareholders need to act now.”

Karen Brade, chair of Keystone Positive Change, one of the other trusts Saba is targeting, echoed these views. "I am very pleased that Herald shareholders overwhelmingly rejected Saba’s unwelcome proposals.

"This is good news, but it has no direct bearing on the outcome for Keystone. Keystone shareholders still must come out in their entirety, every one of them, and VOTE AGAINST Saba’s resolutions," she added.

Voting dates for the other six investment trusts targeted by Saba are here.