Saba Capital Management has agreed a deal that will allow shareholders in Schroder UK Mid Cap Fund to exit their positions at net asset value through a large-scale tender offer, marking another ‘win’ in its ongoing campaign across UK-listed investment trusts.
Under the proposed arrangement, and subject to shareholder approval, the trust will launch an offer for up to 100% of its ordinary shares, giving investors the opportunity to sell their holdings at or close to NAV, less associated transaction costs. The structure is designed to provide full liquidity to long-term shareholders in a market where closed-end funds often trade at persistent discounts.
Saba, which is the largest shareholder in the fund, has committed to support the resolution and tender its entire position as part of a three-year standstill agreement with the board. The deal will only proceed if less than 49.87% shares are tendered, which would ensure that the company has net assets of more than £125m after completion of the tender offer, based on the latest NAV.
The Schroder UK Mid Cap Fund deal is the latest in a series of similar outcomes secured by Saba across the UK investment trust sector.
