Saba Capital Management, an activist investing hedge fund based in New York, announced plans to displace the board of Edinburgh Worldwide Investment Trust (EWIT) for the third time in little over a year on 10 February
Days later, it followed up with a proposal seemingly aimed at capturing the hearts and minds of EWIT’s shareholders, who have decisively voted down its proposals so far. Saba now recommends that, should its proposals be voted through at the trust’s upcoming AGM, the new board offers current shareholders a 100% cash exit at 99% of the trust’s net asset value (NAV).
“While we reiterate that the new Board will be fully independent from Saba, we recognise that shareholders would like the choice not to continue with the company,” said Saba in a statement on 12 February. “Therefore, we recommend that the new directors, if elected, offer all shareholders a 100% cash exit at 99% of the company’s NAV.”
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Shareholders of Edinburgh Worldwide (LON:EWI) rejected Saba’s proposals at a requisitioned general meeting in January 2026. The vote echoed the result of a similar proposal last February, when EWIT was among seven UK investment trusts whose boards Saba attempted to replace with appointees it had nominated.
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Saba was convincingly beaten in both votes, with 98.4% of votes cast at last year’s vote and 92.7% at this year’s having been cast against the proposals (excluding Saba’s own votes).
Why has Saba proposed a cash offer for EWIT’s shareholders?
Saba maintains that EWIT has consistently underperformed relevant stock market indices in terms of performance and has claimed that a sell-down of the investment trust’s flagship holding, Elon Musk’s SpaceX, was mishandled in order to facilitate a merger with fellow Baillie Gifford-managed trust, Baillie Gifford US Growth (LON:USA).
But so far, it has been unsuccessful in persuading EWIT shareholders to agree.
“Only three weeks ago, a record 70% of shareholders participated in the second vote in less than a year, with an overwhelming majority (93%) of non-Saba holders again rejecting its proposals,” said a spokesperson for EWIT in response to the news that Saba was proposing a third vote. “Despite this decisive outcome and the strong shareholder opposition to Saba taking control, Saba is evidently choosing not to listen.”
The trust’s shareholders appear to be reluctant to remain invested in a vehicle that may pursue a different strategy under the new board of directors (Gabriel Gliksberg, Michael Joseph and Jassen Trenkow) that Saba is proposing.
Could other trusts be targeted by Saba?
While it appears that Saba is for now focusing its efforts on EWIT, it has substantial stakes in other UK investment trusts, prompting speculation that further corporate actions could be incoming.
Two of these trusts have attempted to pre-emptively dissuade Saba from taking actions against their boards by offering a tender offer to shareholders at close to NAV.
Saba rejected one of these, from Herald Investment Trust (LON:HRI), meaning the tender offer was withdrawn on 3 February. Herald’s board is in discussions with Saba over an alternative proposal that will enable Saba to exit the trust that is amenable to the hedge fund. If no agreement can be reached, the board has proposed a backstop tender offer with a lower voter threshold, meaning Saba couldn’t effectively veto it.
The other, Impax Environmental Markets (LON:IEM) is due to vote on the tender offer at a general meeting on 23 February.
