Saba Capital has moved to block the proposed merger of the Baillie Gifford US Growth Trust and the Edinburgh Worldwide Investment Trust, according to a report by Reuters.
The deal would have created a larger vehicle focused on US equities and offered shareholders a cash exit of up to 40%. Saba, which holds 28% of the Baillie Gifford US Growth Trust and 25% of EWIT, declined to support the plan, effectively halting the transaction.
The decision extends Saba’s dispute with the boards of both trusts following earlier takeover proposals that were rejected by more than 98% of other shareholders. Saba has argued the sector suffers from chronic underperformance, while the trusts have called the hedge fund’s campaign self-interested.
Saba has also been pushing for changes to the board at EWIT. The Trust has said it will continue talks to encourage Saba to back the proposed merger.
In a statement Saba said: ““By pushing for a merger that benefits Baillie Gifford rather than shareholders, EWI’s Board has confirmed where its loyalties truly lie. Shareholders deserve a Board that puts them first – not another cosy deal that entrenches an unaccountable manager.”
