Two large investment trust companies run by Edinburgh-based Baillie Gifford said on Tuesday that New York activist hedge fund Saba Capital Management is blocking a proposed merger of the funds.

Saba is a shareholder of both the £850 million Edinburgh Worldwide Investment Trust plc (EWIT) and the £890 million Baillie Gifford US Growth Trust plc.

On November 27, Saba made public in an Open Letter a fresh attempt to replace the entire board of EWIT. Saba’s founder and chief investment officer is activist investor Boaz Weinstein.

Baillie Gifford US Growth Trust plc chair Tom Burnet said: “We are highly disappointed that Saba has chosen once again to impede other shareholders by blocking the board from credibly presenting a potential merger opportunity that would result in a materially improved position for shareholders of both companies.

“This potential merger opportunity includes the offer of substantial liquidity for those shareholders who wish it.

“I and my fellow directors have always been very clear: we want to protect and create value for all our shareholders. That is our priority. We want to be able to put proposals for a way forward which are fair and equitable to all our shareholders. The board remains determined in its commitment to act in the interests of shareholders as a whole.”

EWIT chair Jonathan Simpson-Dent said: “EWIT has made strong progress since we reset the company on a path for growth a year ago and we are confident that today it offers shareholders a distinctive portfolio of high-growth companies that would be extremely difficult to access elsewhere in the market.

“As this strategy continues to bear fruit, we believe that a merger with USA would accelerate value for shareholders, creating a larger, more liquid and cost-effective investment trust, while retaining the exposure to disruptive and transformative companies.

“Crucially, it would also provide a fair cash exit for those, such as Saba, whose agendas may differ.

“Throughout the last year we have made numerous attempts to engage with Saba to understand their objectives and find an equitable and holistic solution including most recently the proposed merger with USA.

“Saba’s lack of support suggests to us that their agenda is to take control of the company for their own commercial gain at the expense of the remaining 70% of shareholders.

“The board will make every effort to continue the engagement with Saba in order that we can find a solution to the current impasse and focus exclusively on maximising value for all of our shareholders.”

Saba Capital replied: ““By pushing for a merger that benefits Baillie Gifford rather than shareholders, EWI’s board has confirmed where its loyalties truly lie. Shareholders deserve a board that puts them first — not another cosy deal that entrenches an unaccountable manager.”

EWIT added: “On 1 December 2025, the Company’s Financial Adviser met with Saba to seek support for the proposed merger with USA. EWIT had requested this meeting several days before the Board received the Open Letter from Saba. During the meeting, the details of the merger proposal were presented, including the option to provide shareholders with a cash exit should they desire.

“Saba immediately rejected the proposed merger. Instead, Saba reiterated its ongoing desire for a change of Board and a review of the Company’s future.

“Saba’s response indicates to the Board that Saba’s ultimate objective is to gain control of the Company without offering a control premium, thereby trapping the remaining 70% of shareholders in a company run for the exclusive benefit of its largest investor.

“This is not Saba’s first attempt to take control. In February 2025, Saba’s proposal to seize control of the Company was overwhelmingly rejected by 98.4% of voting non-Saba shareholders.

“Given the compelling strategic rationale for the proposed merger, the Board will seek to continue its discussions with Saba in an effort to persuade them of the benefits to all shareholders and to them, including the option for a cash exit. Without Saba’s support, the proposed merger cannot progress.

“The Board also welcomes any comments from other shareholders and will provide a further update in due course.”

Baillie Gifford US Growth Trust added: “The Directors firmly believe that the merger would be in the interests of all shareholders, including Saba. However, due to the size of its holding, Saba is able to block the requisite shareholder approvals. Notwithstanding Saba’s lack of support for the merger, the Board would like to consult with shareholders more broadly on their views …

“The Board has … negotiated and advanced a credible proposal to combine with Edinburgh Worldwide Investment Trust plc (EWIT). Both companies have a similar investment philosophy.

“In addition, there is a high commonality of EWIT’s portfolio with that of the Company: as at 30 November 2025, EWIT’s assets had c.75% North American geographical exposure, were c.22% invested in private companies and included 8 investments in common with the Company, accounting for c.31% of EWIT’s assets …”