Saba Capital, which owns approximately 30% of Edinburgh Worldwide Investment Trust's shares, is attempting to seize control of the trust's board, marking its third such effort after previous bids last year and in January were defeated by shareholders. This ongoing campaign centers on EWIT's most significant asset: a stake in SpaceX valued at an estimated £165 million. 3 trillion upon going public.
The trust's board has urged shareholders to vote against Saba's board nominees and support the existing directors at the upcoming annual general meeting. EWIT's board has proposed a 100% tender offer to allow shareholders to exit at close to net asset value, preserving exposure to SpaceX until a future liquidity event. 2% in favor.
Saba has put forward an alternative proposal that gives investors an option to exit at the full value of their holdings in the coming weeks or after SpaceX's IPO. Saba has accused EWIT's board of overseeing five years of 'unacceptable' performance and being 'out of touch' with shareholders, and has claimed EWIT covered up its chair's failings in a previous role. The previous failed attempts by Saba to unseat EWIT's board highlight the contentious nature of this battle, with shareholder advisory firms PIRC and ISS recommending investors reject Saba's nominees.
We thank our fellow shareholders for their support in rejecting the Ewit board’s deeply flawed tender proposal. The board’s failure to put forward a well-thought-out tender that the majority of shareholders are willing to support makes it clear that chair Jonathan Simpson-Dent and his fellow directors are completely out of touch with their own shareholders.
Regulatory context has become a focal point, with EWIT chair Jonathan Simpson-Dent and Impax Environmental chair Glen Suarez calling on the Financial Conduct Authority to tighten rules to protect investment trusts from activist campaigns. However, the FCA has resisted calls to tighten rules on trusts and false communications, with Simon Walls stating he is not inclined to intervene in activist campaigns. Several unknowns loom over this conflict, including the exact date of EWIT's upcoming annual general meeting.
Another uncertainty is whether Saba will tender its shares in EWIT's tender offer. The specific rule changes that EWIT and Impax are lobbying the FCA to implement regarding activist campaigns remain unclear. Further unknowns involve the current status of SpaceX's planned IPO and how it might affect the valuation of EWIT's stake.
The composition of small investors in EWIT, including how many hold shares and what their typical voting turnout is, also remains unspecified. The battle underscores the high stakes involved, as Saba's persistent efforts reflect its strategic push to influence EWIT's governance and capitalize on the potential windfall from SpaceX's public listing. With shareholder votes pending, the outcome could reshape the trust's direction and impact investor returns in a volatile market environment.