Edinburgh Worldwide Investment Trust (EWIT) has called on shareholders to reject proposals from activist investor Saba Capital to replace members of its board, arguing that the trust has made progress and the change would create uncertainty, according to a report by CNBC.
Saba, founded by Boaz Weinstein and now EWIT’s largest shareholder with a 30% stake, has secured a General Meeting to seek the removal of the current board and the appointment of three new directors. The US hedge fund says the changes are required to address what it describes as significant value destruction at the technology-focussed investment trust over recent years.
EWIT chair Jonathan Simpson-Dent said the board had made “strong progress” over the past 12 months, citing a NAV total return of 16.2%, ahead of the 6% return from its benchmark, the S&P Global Small Cap Index. He also pointed to a share buyback programme that has helped narrow the trust’s average discount to 5.3%, compared with a peer group average of 17.9%.
The dispute follows a failed attempt by Saba to replace the board earlier this year and comes after the hedge fund used its increased stake to block a proposed merger between EWIT and Baillie Gifford’s US Growth Trust. EWIT said it continues to offer investors exposure to a differentiated portfolio of innovative growth companies, including a significant holding in SpaceX, and urged shareholders to vote against Saba’s proposals at the forthcoming meeting.
