This week, much to our disappointment, Edinburgh Worldwide (EWI) announced proposals for a 100% tender offer which, if enacted, would bring about the demise of the trust as we know it. On the face of it, the proposals appear to be a response to the ongoing attacks that EWI is facing from the New York-based hedge fund, Saba Capital. However, this latest development came as a surprise, not least because shareholders have twice voted down proposals from Saba to replace EWI’s board with its own nominees, with the ultimate intention of installing itself as manager. The results were not flukes. Saba was defeated by hefty margins on both occasions: 98.4% and 92.7% of non-Saba shareholders voted against its proposals, on turnouts of 64.7% and 70.5% respectively. However, because of its own large holdings and traditionally lower turnout from smaller voters, Saba was still able to corral significant proportions of the overall votes – 36.2% and 46.8% respectively.

EWI should have been allowed to keep going

With these huge levels of support for the board and incumbent manager from non-Saba shareholders; a differentiated strategy that is well-suited to, and makes good use of, its closed-end structure; improved performance following a range of shareholder-friendly measures introduced last year; and a board that is neither short of fight nor lacking in its willingness to act in the best interests of shareholders, we felt there was every reason for EWI to continue.

EWI is also unashamedly the most growth-focused of its peers. When you factor in that its investment style had been significantly out of favour in an environment of higher interest rates, it did not make sense to us to give up the potential upside from its portfolio simply to make a quick turn on discount narrowing (something James explained in a February 2025 article – click here).

There have been many twists and turns in this story and, at each stage, we have run our slide rule over both sides’ positions and found ourselves agreeing with EWI’s board. A large part of this – as we explore below – is that Saba’s proposals were flawed from the outset and, if enacted, would have significantly disadvantaged non-Saba shareholders in EWI. There have been repeated calls for Saba to rethink its approach, but it has doggedly refused to do so.

As a result, QuotedData has spent the last year or so advocating strongly for EWI to be allowed to continue. However, having heard what the board had to say when it announced the 100% tender, we now find ourselves advocating just as strongly for shareholders to vote in favour of the board’s proposals, even though this comes at the expense of losing exposure to an exciting investment.

With the bell now tolling for EWI, this seems an appropriate moment to reflect on how we got here – and why winding up EWI now appears to be the best option for non-Saba shareholders.

Saba offered a flawed strategy from the start

This saga began in earnest in late December 2024 when, just as the market was breaking for Christmas, Saba launched a campaign targeting seven UK-listed investment trusts simultaneously, including EWI (you can read its open letter to shareholders of these funds, as well as our thoughts on Saba’s proposals at the time, here). The hedge fund had been building stakes in a range of trusts for some time but had, disappointingly, refused to engage with the boards that had approached it, leaving these trusts – and the wider market – largely in the dark.

With Saba at last revealing its hand, we were pleased to finally gain some clarity on its intentions. However, these contained a number of red flags. It is fair to say that Saba’s approach – removing existing boards in their entirety and replacing them with its own nominees, who would then appoint Saba as manager – has worked well for it in its home market. However, it is also fair to say that this approach was never likely to be well received here in the UK, where we traditionally enjoy much higher standards of corporate governance.

And what about the private holdings?

We also had additional concerns for trusts such as EWI and USA – both managed by Baillie Gifford – that Saba’s calls for ‘substantial liquidity’ ignored these trusts’ unquoted holdings. These include companies such as SpaceX – long EWI’s largest holding, a significant driver of performance, and arguably one of the most exciting prospects in the trust’s portfolio.

This is a thorny issue, as access to SpaceX has been a key attraction for a number of EWI shareholders, Saba included. Indeed, the hedge fund complained bitterly when EWI’s manager took the decision to trim the position and lock in some of the gains, reasoning that SpaceX had become outsized within the portfolio (click here to read more). Unfortunately, Saba’s most recent proposals – see below – still fail to address this problem in a way that is fair to all shareholders.

Saba voted down convincingly…

What followed Saba’s initial onslaught is well documented, so I will not repeat it in detail here, other than to say that the industry rallied to make the case that Saba’s proposals were harmful to fellow shareholders. As a result, shareholders in all seven funds turned out in force and Saba lost all seven requisitions convincingly.

The quick succession of damning results was quite a come-down for an outfit that had thrown down the gauntlet to the seven funds with the taunt, “Aren’t you embarrassed?”. Anecdotally, due to a mistake in its original requisition request, the vote among EWI’s shareholders was the last to take place, and Saba’s defeat there effectively put the nail in the coffin of its original campaign.

…but was not deterred…

Following such a seismic defeat, you might have expected Saba to undertake a significant rethink of its approach. Like the trusts it has been repeatedly targeting, Saba too is a steward of its shareholders’ capital. We have long thought that it is highly questionable for Saba to be using its investors’ funds in an attempt to grow its own AUM in this way. It has already committed significant sums to the campaign and, having manoeuvred itself into a number of tricky positions, it should be actively engaging with its targets to find workable solutions for the benefit of its own investors as quickly as possible.

(As an aside, we think there is a lesson here – particularly when you look at the performance of Saba’s own funds, and the limited efforts it puts into managing their discounts once it has seized control – for shareholders in funds such as EWI that could otherwise find themselves trapped in a Saba-controlled vehicle.)

Unfortunately, this was not to be the case. Saba requisitioned EWI again with the same set of proposals in early December 2025. Shareholders voted on them on 20 January, rejecting them once more. However, while the overwhelming majority of non-Saba shareholders voted against Saba taking the helm, the harsh reality is that, given the size of Saba’s stake, the margin among all votes cast was relatively narrow – 53.2% to 46.8%. It is therefore not difficult to see how, with further buybacks and shareholder fatigue, Saba could eventually push its agenda through.

A war of attrition

It seems that this is precisely what Saba is banking on. On 10 February – three weeks to the day after its proposals were rejected – Saba submitted the same resolutions to be voted on at EWI’s upcoming AGM (click here to read more). Having been rejected twice and returning with the same offering a third time, it became clear that Saba was prepared to wage a war of attrition on its fellow shareholders.

There was one key difference this time. Two days later, Saba announced that it would offer a full cash exit – close to net asset value – for shareholders who did not wish to remain invested in EWI. This is something we have long called for in relation to all of the trusts Saba has targeted. However, EWI shareholders should still beware, as this does not properly address the issue of the private holdings and, in particular, EWI’s crown jewel: its investment in SpaceX.

The long-awaited IPO of SpaceX is expected to occur later this year. Although we are yet to see any indicative pricing, there is considerable excitement around the stock and it is widely expected to be a significant event. The problem for EWI investors with Saba’s proposals is that its exit opportunity would likely occur before the IPO. As a result, EWI investors could potentially be giving up substantial upside – conveniently handing it to Saba – or face the prospect of being trapped in a Saba-controlled vehicle. However, by contrast, this is where EWI’s board’s latest proposal, in our view, is both smart and equitable.

EWI’s board – stuck between a rock and a hard place

EWI’s board has found itself in a very difficult position. First and foremost, it must act in the interests of all shareholders, and it is clear that EWI has a strategy that its shareholders support and would like to see continue. There is also a considerable amount of latent value locked up in the portfolio.

However, the board also has to contend with Saba, which appears hell-bent on dismembering the trust in pursuit of its own self-interest. Clearly, the legislation needs to catch up – a point highlighted by other Saba targets such as Herald and Impax Environmental Markets – and the FCA is now looking to tighten up the rules. However, these things take time and will not happen quickly enough to help any of the funds currently in Saba’s sights.

Unfortunately, for now at least, there is nothing to stop Saba from continuing to return with the same tired proposals until it eventually prevails. In our view, such an outcome would expose non-Saba EWI shareholders to a difficult choice that would likely erode value. For that reason, the time to act is now.

An equitable solution for all EWI shareholders

It is this unpalatable choice that has forced the hand of EWI’s board in offering shareholders a 100% tender. However, unlike Saba’s proposal – which could see the bulk of the upside in SpaceX carved out for the hedge fund – the board’s proposal will provide shareholders with a significant initial cash exit of around 85% of NAV, while allowing them to retain access to the potential future value from the SpaceX holding.

This will take the form of a further cash payment in the future, based on the value of SpaceX once that value has been crystallised. This approach prevents a disproportionate share of that upside accruing to Saba and avoids the need to conduct a fire sale of the asset.

The solution is not perfect. Not only is it a great shame to see EWI wound up, but shareholders may also end up foregoing some of the upside from EWI’s other private holdings. However, compared with the alternatives, it is unequivocally the fairest and best option currently on the table, and we struggle to see a better solution emerging at this point. We therefore, with much regret, recommend that shareholders tender their shares in full. We also think that that, once EWI shareholders are in receipt of their tender proceeds, they might want to consider rolling these into Schiehallion (MNTN) or Scottish Mortgage (SMT) instead.

Marten & Co (which is authorised and regulated by the Financial Conduct Authority) was paid to produce this article on Edinburgh Worldwide Investment Trust Plc.