Key Takeaways
- • Saba Capital, the New York activist hedge fund led by Boaz Weinstein, lost five of six recent shareholder votes across seven UK-listed investment trusts in a three-day period, according to the source headlines.
- • Edinburgh Worldwide, a trust with a large stake in SpaceX, lost a January vote to install three Saba nominees, with non-Saba shareholders backing the existing board by 94%, though Saba's 30% stake narrowed the overall margin to 53% to 47%.
- • Edinburgh Worldwide responded with a proposed 100% tender offer for its own shares, retaining its SpaceX holding (16.6% of the portfolio) until a crystallisation event.
- • Guardian columnist Nils Pratley argues the FCA's rules are not designed to handle persistent activist campaigns and calls for new protections for investment trusts, though the FCA has promised a review.
Summary
Saba Capital, led by Boaz Weinstein, has pursued a sustained campaign against UK-listed investment trusts, targeting seven London-listed companies and seeking to replace their boards. According to the source material, Saba lost five of six votes in a three-day period in its bid to force management change, with the Guardian's Nils Pratley describing an earlier campaign against the "Miserable Seven" trusts as a 7-0 defeat for the hedge fund.
The most recent escalation centred on Edinburgh Worldwide, a trust known for its large holding in Elon Musk's SpaceX. In January, Saba forced a vote to install three nominees on the board and lost, with 94% of non-Saba votes supporting the existing board and strategy. Because Saba holds around 30% of the stock, the overall result was 53% to 47%. Saba then tabled a further motion, scheduled for a vote next month, to appoint the same three nominees.
In response, Edinburgh Worldwide proposed a 100% tender offer for its own shares at close to asset value, with the SpaceX holding retained until a "crystallisation event," a reference to Musk's planned listing of the rocket company this summer. Chair Jonathan Simpson-Dent described the situation as having reached "the end of the road" and criticised Saba's "repeat smash and grab cycle." Pratley argues the tender offer is a pragmatic defence against a back-door attempt to install Saba as manager, but says such measures should not be necessary.
Other coverage cited in the sources notes that Herald has called in the FCA over its own defence, that a restructuring deal was reached with another targeted trust, and that Baillie Gifford US Growth Trust's chair says Saba will not engage with the board. Pratley contends the FCA's listing rules are inadequate against persistent activists and calls for protections comparable to those for trading companies. The FCA has announced a review, which Pratley notes will conclude too late for Edinburgh's current situation.
The most recent escalation centred on Edinburgh Worldwide, a trust known for its large holding in Elon Musk's SpaceX. In January, Saba forced a vote to install three nominees on the board and lost, with 94% of non-Saba votes supporting the existing board and strategy. Because Saba holds around 30% of the stock, the overall result was 53% to 47%. Saba then tabled a further motion, scheduled for a vote next month, to appoint the same three nominees.
In response, Edinburgh Worldwide proposed a 100% tender offer for its own shares at close to asset value, with the SpaceX holding retained until a "crystallisation event," a reference to Musk's planned listing of the rocket company this summer. Chair Jonathan Simpson-Dent described the situation as having reached "the end of the road" and criticised Saba's "repeat smash and grab cycle." Pratley argues the tender offer is a pragmatic defence against a back-door attempt to install Saba as manager, but says such measures should not be necessary.
Other coverage cited in the sources notes that Herald has called in the FCA over its own defence, that a restructuring deal was reached with another targeted trust, and that Baillie Gifford US Growth Trust's chair says Saba will not engage with the board. Pratley contends the FCA's listing rules are inadequate against persistent activists and calls for protections comparable to those for trading companies. The FCA has announced a review, which Pratley notes will conclude too late for Edinburgh's current situation.
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