Sixth Saba victory as Aberdeen takes HIT mandate – Daily Business

Boaz Weinstein: real choice

Saba Capital Management has secured another victory in its battle over shareholder value with a series of UK investment trusts.

The largest shareholder in Herald Investment Trust has instigated a tender offer which will allow shareholders in the trust to reduce their holdings at close to the net asset value per share.

Saba has agreed to a full exit and a three-year standstill agreement during which it will not seek to change the composition of the board, nor seek to control or influence the board or company or the policies or management of the company.

Herald’s management contract is being transferred from Herald Investment Management Limited to Aberdeen Investments along with the investment team led by founder Katie Potts.

The agreement follows the bitter battle between Saba and Edinburgh Worldwide Investment Trust which resulted in five members of the trust’s board being ousted. A sixth was already retiring.

The New York based hedge fund described the HIT agreement as a “landmark outcome” for its shareholders. The deal will involve a tender offer for up to 66% of its issued share capital. 

HIT marks the sixth UK investment trust of Saba’s seven original campaigns launched in December 2024 where its engagement has resulted in a material liquidity or governance outcome for shareholders.

Boaz Weinstein, founder and chief investment officer at Saba, said: “Six successful outcomes from our seven original UK campaigns — that record speaks for itself.

“Shareholders will now have real choice: immediate liquidity close to NAV, or continued exposure to the same strategy they believe in under a stronger institutional platform.

“This is what shareholder engagement looks like when boards act in the interests of the people they serve, and it is what Saba will keep demanding across the UK investment trust sector.”

Ms Potts said: “Herald has delivered a clear and successful investment strategy since 1994, and this disciplined approach will remain unchanged with Aberdeen, who I look forward to joining.

“Our focus remains firmly on the technology and communications sectors, which continue to benefit from exceptional innovation and strong long-term growth prospects. HIML is pleased to report that the share price and NAV per share of HIML’s investment trust and fund are at record levels.

“Looking ahead, we will benefit from Aberdeen’s enhanced marketing reach and will endeavour to continue to deliver above average returns for shareholders.”

Dan Coatsworth, head of markets at AJ Bell, says: “Herald Investment Trust lives to fight another day. After considerable disruption from activist investor Saba, Herald has struck a deal that will see it reborn under the care of asset manager Aberdeen.

“Fund manager Katie Potts will move over to Aberdeen, and Herald will conduct a tender offer for up to 66% of its issued share capital, effectively providing Saba with an exit close to net asset value.

“Saba has agreed to stop any further meddling with Herald for three years and the same for a further eight investment trusts managed by Aberdeen.

“Both sides appear to be declaring victory, which is slightly odd. Herald says it has secured its future, while Saba says it has now won six campaigns against UK investment trusts.

“While both sides have got something they want, it still feels like a compromise. Herald continues to operate, but risks giving up some of its assets. Saba bought cheaply and can sell a chunk at fair value, yet the standstill agreement means it is effectively silenced as an activist by Aberdeen.

“The investment trust industry has been tearing its hair out over the activist’s meddling and might think the Herald outcome is the blueprint to follow if it means Saba can eventually go away.”

#Sixth #Saba #victory #Aberdeen #takes #HIT #mandate #Daily #Business