Saba Capital Management, led by New York activist financier Boaz Weinstein, has demanded the resignation of the entire board of Impax Environmental Markets. Saba, which is the trust's largest shareholder, wants to replace the current directors with a new board of independent directors.
In a statement, Saba said it had been 'profoundly disappointed' with the trust's performance, noting that over the past five years, the share price had lagged behind its benchmark by more than 75 per cent. The hedge fund also pointed to the recent exit tender offer, in which investors representing just under 78 per cent of shares chose to cash out their stake in the firm's assets. 'Against this backdrop, the scale of the shares tendered (77.83 per cent) in the recent Exit Tender Offer makes clear there is little demand for this Company to continue in its current state. In our view, any board would ordinarily step aside following this result. In light of this, we respectfully request that you resign,' Saba said.
Against this backdrop, the scale of the shares tendered (77.83 per cent) in the recent Exit Tender Offer makes clear there is little demand for this Company to continue in its current state. In our view, any board would ordinarily step aside following this result. In light of this, we respectfully request that you resign.
Impax Environmental Markets confirmed that 77.83 per cent of shares were tendered in the exit offer. According to Daily Mail - Money, the 78 per cent figure apparently includes 'the majority, if not all' of Saba's own position. Saba expects to hold 29.9 per cent of the company's shares after the exit tender offer, the hedge fund said.
Glen Suarez, chairman of Impax Environmental Markets, responded in a statement: 'There are no winners here. This was an extraordinarily difficult situation to navigate, trying to balance the varied desires of all of our different shareholders. The overwhelming majority of shareholders voted just a year ago in favour of IEM's continuation, but Saba made it clear in subsequent interactions with the chair that they did not agree. As a result, the board acted proactively to offer an exit to all shareholders who wished to take it. The board will now carefully consider all options regarding the company's future, and will provide a further update with the notice of AGM, to be announced shortly.'
Honestly, we are as confused as everyone else about the new Saba announcement. Today, Saba says it has a 29.9 per cent stake – more than it had before the tender – but, it appears to be saying so by press release rather than a notification to the market as it would be required to do.
According to Daily Mail - Money, James Carthew, head of investment company research at QuotedData, expressed confusion about Saba's announcement, noting that Saba claimed a 29.9 per cent stake via press release rather than a formal market notification. Carthew added that if Saba indeed owns 29.9 per cent of the remaining shares and is determined to seize control, it will probably succeed.
Saba has also targeted a number of other investment trusts, including Edinburgh Worldwide Investment Trust, as part of a broader activist campaign. The outcome of these efforts remains uncertain, as does the future of Impax Environmental Markets following the shareholder exit.
If it is true that it owns 29.9 per cent of the rump and is determined to seize control, then it will probably do so.
There are no winners here. This was an extraordinarily difficult situation to navigate, trying to balance the varied desires of all of our different shareholders. The overwhelming majority of shareholders voted just a year ago in favour of IEM’s continuation, but Saba made it clear in subsequent interactions with the chair that they did not agree. As a result, the board acted proactively to offer an exit to all shareholders who wished to take it. The board will now carefully consider all options regarding the company’s future, and will provide a further update with the notice of AGM, to be announced shortly.