Saba Capital has made a push to replace the board of a Baillie Gifford run investment trust.
A letter from Saba’s founder, Boaz Weinstein, to Edinburgh Worldwide Investment Trust has called for a general meeting to oust the board.
Saba owns around 30 per cent of the shares of the investment trust, which was launched in 1998.
It is the second time the trust has been targeted by Saba after it was one of seven the US hedge fund tried to take over the board of earlier this year.
In the letter, Weinstein said: “As you know, we have been profoundly disappointed with the share price performance of the company for some time, which led us to requisition a general meeting nearly a year ago.
“At that time, you vigorously rejected our legitimate concerns and encouraged shareholders to dismiss them, imploring them to ‘protect your trust’.”
Weinstein accused the board of not making changes to address underperformance of the investment trust.
The discount currently sits at around 5 per cent and hit lows of 9.3 per cent earlier in November.
“We remain profoundly frustrated by the board’s prolonged inertia, especially given the decisive actions taken by the boards of several other UK investment trusts to increase share prices and narrow persistent discounts to NAV,” wrote Weinstein.
“We do not have faith in the current board’s ability to implement the necessary strategic changes.
“As the company’s largest shareholder, we feel a duty to our fellow shareholders to drive this essential change.”
Saba is proposing removing the entire board of the investment trust and replacing with “independent directors who are committed to delivering long-term value for all shareholders”.
Saba said it will issue formal requisition documents in due course.
Jonathan Simpson-Dent, chair of Edinburgh Worldwide, said the trust was disappointed by the letter and has sought to engage with Saba over the past year.
He said: “While we are open to discuss board composition with Saba, we would strongly reject any proposal to replace the entire board and the ambiguity that would follow.
“The board continues to seek constructive dialogue with Saba. The board’s financial adviser had already requested a meeting with Saba ahead of receiving today’s open letter, which Saba had requested be deferred until next week. We will update shareholders on further developments in due course.”
tara.o’connor@ft.com
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