EWIT and Saba swap angry insults in bitter feud – Daily Business

Boaz Weinstein runs Saba

An Edinburgh investment trust has accused its US pursuer of “cynically” rejecting an offer to shareholders despite indicating it would recommend the proposal.

At a general meeting on Friday, the board of Edinburgh Worldwide Investment Trust failed to win sufficient support from shareholders for a tender offer.

It was the latest attempt to halt attempts by Boaz Weinstein’s New York hedge fund Saba Capital Management to oust the directors and install its own nominees.

Despite overwhelming opposition to two previous Saba approaches, only 46.2% of shares were voted in support of the tender offer with 53.8% against.

The trust declared that the votes against the proposal were “almost entirely by Saba and two other institutions”.

Trust chairman Jonathan Simpson-Dent accused Saba, which owns about 30%, of behaving cynically as it had not engaged with the other shareholders.

The tender offer would have enabled shareholders to cash out at close to fair value and retain access to the potential future value from its stake in Elon Musk’s SpaceX.

Cash would have been returned in early May, while trust manager Baillie Gifford would have sold EWIT’s shares in SpaceX whenever possible. Of EWIT’s £728m of assets under management, SpaceX accounts for 16.3%.

After the vote, Mr Simpson-Dent admitted there is an increased likelihood of Saba seizing control at the company’s AGM on 30 April.

Saba said: “We thank our fellow shareholders for their support in rejecting the EWI board’s deeply flawed tender proposal, which would have forced shareholders into untradeable SpaceX tracker shares while exposing them to significant potential tax liabilities.

Jonathan Simpson-Dent accused Saba of cynicism (pic: DB Media Service)

“The board’s failure to put forward a well-thought-out tender that the majority of shareholders are willing to support makes it clear that chair Jonathan Simpson-Dent and his fellow directors are completely out of touch with their own shareholders.

“Over the past five years, EWI’s performance has been unacceptable by any objective measure – ranking 66th out of 66 equity trusts with more than £500 million in assets.

“Yet instead of taking responsibility for the company’s last-place performance, the board continues to pursue actions that maintain the status quo and prioritise the incumbent directors’ self-interests at the expense of shareholders’ financial interests.”

EWIT hit back by accusing Saba of failing to support the tender offer, despite having indicated less than two weeks ago that it would recommend this same proposal.

Mr Simpson-Dent said: “It is extraordinary that Saba has now chosen to block its own proposal which it claims it is still endorsing.

“This complete contradiction lays bare the fact that Saba cannot be trusted to follow through on its own commitments, even where those commitments were made publicly to shareholders.

“Saba has cynically claimed the board is out of touch with shareholders, yet Saba has never taken the time to engage with retail shareholders or the majority of institutional shareholders, despite repeated invitations.

“A significant number of shareholders have once again expressed their desire not to be in a Saba-controlled vehicle.  

“Saba’s actions are not about improving outcomes for all shareholders; they are about control. Saba’s announcement today makes that unequivocally clear. If its nominees were appointed, there can be no confidence that any stated intentions would be honoured.

“Shareholders now face a clear choice: protect the company’s independence and long-term strategy, or risk handing control to a party whose actions have demonstrated inconsistency, opportunism and disregard for shareholder clarity.

“We urge all shareholders to act and vote in record numbers. Vote for the board’s resolutions and vote decisively against Saba’s attempt to take control of your company.”

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