9th Jan 2026 10:17
(Alliance News) - Herald Investment Trust PLC shares rose on Friday after it announced plans to offer all stockholders the option to sell their entire stakes.
The trust announced the proposals amid concerns that activist investor Saba Capital Management LP, will "gain control" of its board or management.
Following the announcement, shares in Herald Investment Trust traded 7.7% higher at 2,648.34 pence each in London on Friday morning. The stock is up 9.0% since the year began.
Herald, which aims to achieve capital appreciation through investments in smaller, quoted technology and communications companies, intends to offer all eligible shareholders the opportunity to sell 100% of their stock. This includes Saba, whose holding is approximately 30.7%.
Herald said it believes that, if implemented, this tender offer will allow it to focus on delivering strong investment returns with a supportive and stable shareholder base. It also expects the offer to make it "more attractive to new investors", while providing a "fair exit opportunity" to short-term shareholders.
Among other things, including shareholder approval at Herald's next general meeting, the offer is conditional upon Saba tendering all, or materially all, its shares in the company.
"The board is taking decisive action today to initiate a full and fair choice for shareholders to continue with the current manager and mandate or to receive cash at close to net asset value," Herald Chair Andrew Joy commented. "The board has assessed that it is not sustainable to do nothing given that a process of attrition may eventually see Saba able to win a simple majority vote even though it itself is a minority shareholder."
Joy noted that Saba could block the tender offer, due to its ownership of more than 25% of Herald.
However, Herald also announced "contingency plans", saying that if Saba prevents the tender offer from proceeding, the trust will launch an alternative "backstop" tender offer.
The backstop tender offer, Herald said, would require a lower shareholder approval threshold and therefore would not need Saba's support to go ahead.
"The purpose of the backstop tender offer is to ensure that shareholders have the opportunity to exit close to net asset value, at a time before Saba might gain control of the board or the management of the company," Herald explained.
Saba has attempted to remove Herald's current board twice, firstly through a requisitioned general meeting last January and then by voting against the company's continuation and re-electing the directors. In both cases, the attempts were defeated due to a lack of support from other shareholders.
Herald continued: "If the board does not act, there is a real risk that Saba may succeed at a future vote in changing the board and taking effective control of the company.
"Although Saba might seek to appoint directors who are nominally independent, the board believes that Saba continues to aspire to take effective control of the company and its assets under management, with the risk of leaving other shareholders stranded in a company with a different manager and strategy that they did not choose to invest in...the board has concluded that it must act now to ensure a fair outcome for all shareholders."
By Emma Curzon, Alliance News reporter
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