Shareholders of the £1.1 billion Baillie Gifford US Growth Trust plc have rejected a third attempt by New York hedge fund Saba Capital to replace the investment trust’s existing board.
At the Baillie Gifford US Growth Trust AGM on Friday, all of the ordinary resolutions put forward by the company were approved by shareholders.
The Saba resolutions were rejected.
The Baillie Gifford fund said: “The board notes that the votes in favour of the Saba Resolutions were almost entirely attributable to Saba and Sessa Capital IM, L.P.
“Excluding the votes of Saba and Sessa, 99.2% of the votes cast were in line with the board’s recommendations.
“Ordinary resolutions 4 – 7 (inclusive), relating to the re-election of the existing directors, were passed.
“Excluding the votes of Saba and Sessa, which were cast against the resolutions, 99.5% of the votes cast were in favour of the re-election of the existing directors.
“As the board has stated previously, it welcomes dialogue with all shareholders. Following this endorsement of the company’s strategy and emphatic rejection of the Saba Nominees by the independent shareholders, the board will engage with Saba and Sessa Capital to seek a long-term solution in the interests of shareholders as a whole.
“Special resolutions 13 and 14 (regarding the disapplication of pre-emption rights and the market purchase of the company’s own shares) did not pass. The votes against these resolutions were almost entirely attributable to Saba and Sessa Capital.
“While Resolutions 8-12 (inclusive) passed, Resolutions 9 and 12 received a significant number of votes against. Once again, the Board notes that those votes were almost entirely attributable to Saba and Sessa Capital.
“Excluding the votes of Saba and Sessa, 99.5% of the votes cast on those Resolutions were in line with the Board’s recommendations.”
Baillie Gifford US Growth Trust chair Tom Burnet said: “On behalf of the board, I would like to pass our gratitude to our independent shareholders for their continued support.
“Those shareholders have again delivered a clear and decisive verdict. They have overwhelmingly rejected Saba’s nominees.
“For the third time, they have also expressed their clear support for the current board. Repeatedly revisiting matters on which almost all of our independent shareholders have plainly already expressed their view places an unnecessary burden on the company, diverting management time and resources from the delivery of the company’s strategy and the creation of long-term shareholder value and incurring significant costs.
“Baillie Gifford US Growth is a unique investment trust, offering investors access in scale to the most exciting public and private investments in the US.
“Since USA’s launch in 2018, it has generated returns in the top decile of all UK listed investment companies and the top decile of all US-focused open-ended funds globally. We are pleased the AGM result represents a clear endorsement from the vast majority of independent shareholders for the current differentiated and high performing strategy to continue.
“We strongly welcome the reforms under consideration by the FCA, and the efforts of the AIC and others, to strengthen protections for all shareholders. It is critical that these new rules take effect as soon as is practicable so that trusts are better protected from opportunism that is not in the interests of shareholders as a whole.
“We welcome engagement with all shareholders and look forward to working constructively with Saba and Sessa with the objective of delivering a long-term solution that is in the interests of shareholders as a whole.”
Richard Stone, CEO of the Association of Investment Companies (AIC), said: “Shareholders have come out in force to support the existing board of Baillie Gifford US Growth Trust and reject Saba’s nominated directors.
“This is the third time the trust’s shareholders have voted to endorse the current board, but the result was not a foregone conclusion.
“It was only possible due to a big push from the trust, its manager, the wider industry and the media – resulting in a very high turnout of over 82%.
“The result underlines the importance of making sure all investors can vote, including retail investors. Once again, we call on the government to implement the recommendations of the Digitisation Taskforce without delay, including the Bill of Shareholder Rights, to make sure no investor misses the opportunity to vote on the future of their trust.”