The board of Edinburgh Worldwide Investment Trust, managed by Baillie Gifford and offering shareholders an opportunity to invest in Elon Musk’s SpaceX, has increased its resistance to a takeover attempt by Saba Capital Management, according to a report by The Times.
The New York-based fund management firm, an activist investor led by Boaz Weinstein, has amassed stakes worth a combined £1.5bn across seven investment trusts and has requisitioned shareholder meetings to install its own directors, aiming to replace the current fund managers with its own team.
However, Jonathan Simpson-Dent, the chairman of Edinburgh Worldwide, has urged shareholders to reject Saba’s efforts, emphasising that the trust offers unique access to cutting-edge businesses in science and technology, stating: “I see Edinburgh Worldwide as offering huge opportunities to all its shareholders and I am determined to ensure that can continue.”
Investment trusts, listed on the stock market, have boards of directors, but the funds are managed by external firms. These trusts can trade at discounts to the value of their investments if a manager’s stock picks perform poorly or if there is insufficient demand for shares.
Last year, Edinburgh Worldwide saw its discount widen to over 20%, but this gap has since narrowed. The trust has been working to improve performance, including replacing key members of the Baillie Gifford team and narrowing its investment focus. The fund also announced a £130m share buyback to return value to shareholders.
Saba holds a 21% stake in Edinburgh Worldwide and is pushing for changes at three of Baillie Gifford’s funds: Edinburgh Worldwide, the US Growth Trust, and Keystone Positive Change.
Additionally, Saba has targeted two trusts managed by Janus Henderson, the Henderson Opportunities Trust and European Smaller Companies Trust, as well as the CQS Natural Resources Growth & Income Trust. The largest of these is Herald, valued at £1.2bn.
