By Mark McSherry
Baillie Gifford’s £800 million Edinburgh Worldwide Investment Trust said a requisition notice from New York hedge fund Saba Capital Management for a general meeting to replace the trust’s board and appoint alternative directors is not “valid.”
Edinburgh Worldwide said Saba’s nominee “was not the registered holder of sufficient shares on the date the Requisition Notice was served for the Requisition Notice to be a valid request” in accordance with Section 303 of the Companies Act 2006.
“Given the need, in the interests of all shareholders, to ensure full compliance with the company’s legal obligations, the chair notified Saba of this issue and asked Saba whether it wished to resubmit a valid notice,” said Edinburgh Worldwide.
Edinburgh Worldwide chairman Jonathan Simpson Dent reiterated the board’s commitment to “protect” the fund, ensuring the trust can continue with its “exciting mandate” and “stop Saba seizing control.”
Saba Capital Management said last month it has requisitioned the boards of seven UK investment trusts “to convene general meetings of shareholders to provide shareholders the opportunity to vote on resolutions to remove the Trusts’ existing directors and appoint highly qualified directors to replace them.”
Three of the seven funds are managed by Edinburgh-based Baillie Gifford.
The funds being targeted are: Baillie Gifford US Growth Trust, Baillie Gifford’s Edinburgh Worldwide Investment Trust, Baillie Gifford’s Keystone Positive Change Investment Trust, European Smaller Companies Trust, CQS Natural Resources Growth & Income, Henderson Opportunities Trust and Herald Investment Trust.
Saba says it “holds an interest” in approximately 19% to 29% of each trust’s shares, making the hedge fund “the largest investor in each Trust.”
In a stock exchange statement on Friday, Edinburgh Worldwide said: “Request for Saba to provide valid notice: On 18 December 2024, Saba Capital Management, L.P., wrote to the Board of Edinburgh Worldwide Investment Trust with a requisition notice for a General Meeting to replace the Board and appoint alternative directors.
“On review of the documentation, in conjunction with the company’s registrars, it was discovered that Saba’s nominee was not the registered holder of sufficient shares on the date the Requisition Notice was served for the Requisition Notice to be a valid request in accordance with Section 303 of the Companies Act 2006.
“Given the need, in the interests of all shareholders, to ensure full compliance with the company’s legal obligations, the chair notified Saba of this issue and asked Saba whether it wished to resubmit a valid notice.”
Edinburgh Worldwide added: “Board reiterates commitment to protecting Edinburgh Worldwide’s future: Assuming Saba refiles a valid requisition notice aligned to its earlier invalid notice, the board would convene a general meeting and urge all shareholders to vote against these resolutions.
“Saba has proposed a series of actions that the board believes are against the shareholders’ best interests. In any event, the company will convene a general meeting of its shareholders in due course.
“As stated in the initial response to the letter in our announcement also on December 18th, 2024, the board retains a strong conviction in Edinburgh Worldwide’s vision and strategy: To identify and access potential outsized returns from a carefully selected and managed portfolio of ground-breaking businesses aiming to transform end markets; a global and broad sectoral reach with a mandate to deploy a quarter of the company’s capital into exciting private companies.
“To deliver on this, as announced on November 20th, 2024 we have worked with manager Baillie Gifford to bring forward changes to the way the company is managed and its investment parameters, as well as a commitment to shareholders for a capital return opportunity of up to £130 million in 2025.”
A source familiar with the matter said the “invalid notice” was an operational technicality and a re-requisition request has been resubmitted by Saba.
Jonathan Simpson Dent, chair of Edinburgh Worldwide, said: “The Board of Edinburgh Worldwide has a duty to act in the interests of all its shareholders and to ensure correct standards and procedures are followed. I have therefore asked Saba whether it wishes to submit a valid requisition notice. I reiterate the Board’s commitment to protect Edinburgh Worldwide, ensuring it can continue with this exciting mandate and stop Saba seizing control.”