The board of Edinburgh Worldwide Investment Trust plc [LON:EWI] has suffered a setback after shareholders rejected a proposed tender offer designed to provide an exit route for investors amid an escalating battle with activist fund Saba Capital Management.
At a general meeting held last week, the ordinary resolution required to approve the tender offer failed to secure majority backing.
On a poll of votes cast, 46.2 per cent supported the proposal while 53.8 per cent opposed it, reflecting a sharply divided shareholder base. Turnout reached 68.4 per cent of issued share capital, higher than a February 2025 vote but slightly below the record participation seen earlier this year.
In absolute terms, 109.3mn shares, representing 31.6 per cent of the company’s issued capital, were cast in favour. A larger bloc of 127.4mn shares, or 36.8 per cent, voted against, with opposition attributed almost entirely to Saba and two institutional investors. The vote was independently assessed by Civica Election Services.
Latest chapter in storied dispute with Saba Capital
The failed proposal marks the latest development in a protracted dispute between the trust’s board and Saba, which has repeatedly sought to reshape the company’s governance and strategy. The board had positioned the tender offer as a means of allowing dissenting shareholders to exit at a fair valuation, while avoiding the prospect of remaining invested in a vehicle under Saba’s control.
“This is a very disappointing outcome,” said chair Jonathan Simpson-Dent, pointing to continued backing from independent shareholders who have previously rejected Saba’s proposals. He added that the vote underscored how “a determined minority shareholder” could exert disproportionate influence under current market rules.
The result heightens the likelihood that Saba will succeed in appointing its proposed directors at the trust’s annual general meeting on April 30. Such a move would probably trigger a change in investment manager and a significant shift in the company’s mandate.
Alternative plan from Edinburgh Worldwide’s board
Faced with that prospect, the board said it would pivot to an alternative plan. It intends to pursue further tender offers broadly aligned with proposals that Saba itself has indicated it would support. These would give shareholders two opportunities to exit at close to net asset value: one shortly after the AGM and another tied to a potential liquidity event, including a possible IPO of SpaceX, a key underlying holding.
The first of these offers could be launched in the week commencing April 20, unless Saba withdraws its backing within seven days. The board said the approach aimed to provide clarity and avoid prolonged uncertainty during a period of governance risk.
Separately, the company has engaged Deutsche Numis to oversee a share buyback programme in the run-up to the AGM.
Industry bodies have also weighed in. Richard Stone of the Association of Investment Companies said the vote had denied shareholders an opportunity to exit near net asset value while retaining exposure to future upside. He argued that the episode highlighted structural weaknesses in shareholder voting frameworks and called for regulatory reform.
The outcome leaves Edinburgh Worldwide navigating a deeply polarised register, with two entrenched shareholder camps and a pivotal AGM looming.