Hedge fund Saba Capital Management is planning to offer shareholders of Herald Investment Trust a full cash exit near the Trust’s net asset value if its efforts to overhaul the Board of Directors is successful.
In a statement, Saba said: “If shareholders support Saba’s resolutions to reconstitute the HRI Board, Saba would encourage the new Board to offer all shareholders a 100% cash exit at 99% of the Trust’s NAV. As a result, Saba expects that shareholders will have the opportunity to sell their entire position at 99% of NAV, if they wish.
“In addition, Saba would support further changes so this cash exit would be overseen by a fully independent Board and would not expect it to occur for at least a year thereafter, ensuring portfolio value is maximised. These new commitments come in response to feedback from shareholders, who have suffered a -14.7% three-year average discount to NAV, and provide certainty regarding the plan to deliver long-overdue liquidity to all shareholders, alongside the opportunity for greater long-term returns under a new investment strategy and manager.”
Saba has recently requisitioned General Meetings of seven Trusts to provide shareholders the opportunity to vote on resolutions to remove the Trusts’ existing directors and appoint alternative directors.
Saba believes that the current Boards and investment managers have failed to perform versus their benchmarks and have required the hedge fund’s investment to narrow the deep trading discounts to NAV and deliver returns for shareholders.
