20th Jan 2025 11:37
(Alliance News) - Edinburgh Worldwide Investment Trust PLC on Monday called on investors to reject plans by Saba Capital Management LP as it reported a rise in net asset value.
The investment trust said net asset value increased by 13% to 170.40 pence in the 12 months to October 31 from 151.06p a year prior. However, it underperformed the comparative index, the S&P Global Small Cap Index total return, which rose by around 22% in sterling terms.
Among the top contributors to performance over the year were: Alnylam Pharmaceuticals, a drug developer focused on harnessing gene silencing technology; and AeroVironment, a defence contractor headquartered in the USA, that designs and manufactures unmanned aerial vehicles.
The trust also named Gregory Eckersley as an independent non-executive director with effect from February 15.
The trust urged shareholders to reject proposals by Saba Capital to oust current management calling it an "existential threat".
Saba, founded by former Deutsche Bank banker Boaz Weinstein, has requisitioned General Meetings of seven Trusts and nominated representatives to replace existing directors.
Along with Edinburgh Worldwide Investment Trust PLC, the other six trusts targeted by Saba are Herald Investment Trust PLC, Baillie Gifford US Growth Trust PLC, CQS Natural Resources Growth & Income PLC, European Smaller Companies Trust PLC, Keystone Positive Change Investment Trust PLC and Henderson Opportunities Trust PLC.
Chair Jonathan Simpson-Dent commented: "I am deeply troubled by Saba's proposals. Investment trusts are extremely democratic by construction - Saba's proposals are not. Saba's overt land grab for its own end game exploits our long-standing retail Shareholder base, who usually do not vote."
Another targeted trust, the European Smaller Companies Trust called the plans "damaging", adding Saba continues to make "misleading statements".
"It is your board's belief that Saba has targeted your company, which has a long-term record of investment outperformance, because it believes that a sufficient number of shareholders will not vote, allowing it to obtain effective control so it can benefit from the future fees it would earn as manager."
Chair James Williams said: "Saba's intentions are now clear, they want to seize control of your company, appoint themselves as manager, profit from the prospective management fees and change the investment approach. This will deny shareholders the opportunity to benefit from a proven investment strategy in European smaller companies. It could also leave them invested in a vehicle which may be wholly unsuitable for their investment objectives."
It urged shareholders to reject Saba's proposals.
On Monday, Geiger Counter Ltd said Saba Capital held a 10.39% stake as of last Thursday, up from 5.23% before.
Shares in Edinburgh Worldwide Investment Trust were 1.3% lower at 187.84 pence each in London on Monday morning. Shares in European Smaller Companies Trust were 0.7% higher at 176.86p. Geiger Counter was 3.6% higher at 51.40p.
By Jeremy Cutler, Alliance News reporter
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