Edinburgh Worldwide delays Saba vote after ‘invalid’ meeting notice

Edinburgh Worldwide (EWI ) has forced Saba Capital Management to make a fresh request to hold a shareholder meeting early this year, after deeming the US activists’ original request invalid.

While Saba is believed to have already requisitioned another general meeting – for a vote on its proposals to oust the board and ultimately take over managing the trust from Baillie Gifford – the unusual sequence of events is likely to delay a crunch investor vote. 

It follows the launch of a campaign by New York-based Saba against seven investment trusts before Christmas. Herald became the first target to set a shareholder meeting date earlier today, with its directors vociferously defending the tech trust against Saba’s ‘opportunistic’ plans. 

Edinburgh Worldwide’s board announced this afternoon that it had found the nominee used by Saba ‘was not the registered holder of sufficient shares’ on 18 December, when the requisition notice to replace the board with alternative directors was served. 

The issue is believed to concern a technical hiccup related to transferring total return swaps, a type of derivative Saba uses to maximise its voting rights in the trusts it is targeting. 

In an announcement this afternoon, EWI chair Jonathan Simpson Dent said the board had ‘a duty to act in the interests of all its shareholders and to ensure correct standards and procedures are followed’, adding that Saba had been asked to refile its request. 

The chair also repeated, in no uncertain terms, that he believes Saba’s intentions are ‘against the shareholders’ best interests’. He pointed to changes already made late last year to improve returns, including via an expected share buyback of up to £130m in 2025.

‘I reiterate the board’s commitment to protect Edinburgh Worldwide, ensuring it can continue with this exciting mandate and stop Saba seizing control,’ said Simpson Dent

A source familiar with the situation said Saba had already resubmitted an EWI meeting requisition request today, and that the nominee issue was an ‘operational technicality’ that occurred during the holiday period. 

According to the latest stock exchange filing, Saba controlled 21.1% of the voting rights in EWI as of 12 December. 

The other targeted trusts, which include Baillie Gifford US Growth (USA ) and Keystone Positive Change (KPC ) also run by the Edinburgh investment firm, are expected to make further announcements of their own next week. 

Correction: The level of shareholder support required to call a general meeting depends on the domicile of the investment company.