Edinburgh Trust Urges Investors to Back Exit Plan Amid Saba Takeover Threat
The chair of one of Britain's oldest investment trusts has issued a stark warning to shareholders, urging them to support a proposed exit plan as the board faces an imminent takeover threat from a US activist investor. Jonathan Simpson-Dent of Edinburgh Worldwide Investment Trust (Ewit) stated that the board has exhausted all other options in its battle to prevent Boaz Weinstein's Saba Capital from seizing control of the trust.
Persistent Attack from Activist Investor
Simpson-Dent emphasized that Ewit remains under persistent attack from Saba Capital, with the tender offer representing the only viable path to avoid ceding control to its largest stakeholder. In an open letter published to the London Stock Exchange, he wrote, We can only hold back the tide for so long and we believe we are now at the end of the road – this decisive solution gives you a choice to opt out. He added that this move culminates all explored avenues and reflects expectations of a near-future change in control.
Years-Long Saga and Governance Battle
This development marks the latest twist in a years-long conflict between Ewit's board and Weinstein's activist hedge fund. Saba has campaigned since 2024 for an overhaul of the trust's investment and governance strategy, particularly criticizing the sale of its stake in SpaceX, which Weinstein claimed defied commercial logic. Despite previous shareholder votes rejecting Saba's resolutions—including a January meeting where 92% of non-Saba investors voted against—Weinstein has intensified efforts by proposing new board members and an investment manager at the upcoming annual general meeting (AGM).
Details of the Tender Offer
In response, Ewit revealed plans last week for a tender offer, allowing shareholders to realize nearly all their stake in the trust, except for the flagship holding in SpaceX. For the SpaceX investment, investors would wait until a future liquidity event, such as its planned IPO. Simpson-Dent explained that after analyzing Saba's resolutions, the board concluded the hedge fund is likely to succeed in imposing its new board, necessitating this exit strategy. He warned, Saba will not back down until it has broken the status quo and grabbed control of the company's agenda and future direction.
Shareholder Decision and Regulatory Concerns
The chair urged investors to vote in favor of the tender at the AGM, which must be held before the end of April. If approved, shareholders can then decide whether to remain invested under Saba's control or exit at a fair value. Simpson-Dent noted that while most shareholders did not desire this outcome, Saba's actions as a minority shareholder are exploiting regulatory weaknesses to force a different direction for the company. The board has engaged in every reasonable solution with Saba, but the persistent campaign has led to this critical juncture.
Saba Capital was approached for comment but has not yet responded. This situation highlights ongoing tensions in the investment trust sector, where activist investors challenge traditional governance structures, pushing for strategic changes that can reshape long-established funds.
