Shareholders of the Edinburgh Worldwide Investment Trust have voted against proposals from activist investor, Saba Capital, to replace the board.
In a general meeting today (January 20) shareholders, representing 20 per cent of the share capital, rejected Saba’s proposals.
In December, Saba made its second attempt to takeover the board of the investment trust, which is run by Baillie Gifford.
EWIT chair, Jonathan Simpson-Dent, said: “For the second time in less than a year, Edinburgh Worldwide’s shareholders have voted decisively to reject Saba’s proposal to install its own nominees to the board and the uncertainty that would have entailed.”
He said the board was now “resolutely focused” on delivering strong returns for shareholders.
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However, Simpson-Dent said with Saba remaining the largest shareholder, at around 30 per cent, EWIT would continue to seek “constructive engagement” with the company.
He added: “Following a year of significant and costly distraction, we are ready to return our full attention to our primary purpose: investing in innovation, transformation, and exceptional potential in a way that respects the clear wishes expressed by the majority of shareholders both last February and again today.”
James Carthew, head of investment companies at QuotedData, said it was time for Saba to admit defeat and accept “generous exit terms” on Herald and Impax Environmental, the other investment trusts it was attempting to takeover.
He added: “So, a record turnout and almost everyone bar Saba rejecting its proposals.
“Surely the message must get through to Saba that investors don’t want it in charge; not of EWI, nor Herald, nor Impax Environmental Markets, nor any other trust for that matter. If it wants to run a trust it must IPO one.”
Richard Stone, chief executive of the Association of Investment Companies (AIC), said Saba’s failure a second time “shows how much ordinary investors value their investment trust”.
“Shareholders turned out in force to reject the replacement of the independent board with three new directors nominated by Saba,” said Stone.
“Once again, the vote has highlighted the importance of broad shareholder participation so that low turnouts don’t hand victory to large minority shareholders by default.”
tara.o’connor@ft.com
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