Two more trusts defeat US raider: Investors reject Saba Capital plans for major shake-up

Wall Street raider Boaz Weinstein has suffered a stinging defeat after shareholders once again decisively rejected his plans to oust the boards of two investment trusts.

Baillie Gifford US Growth Trust and Keystone Positive Change investors opposed plans by Weinstein’s firm Saba Capital to clear out the board and replace them with its own allies.

Excluding the votes cast by Saba, more than 98 per cent of Baillie Gifford US Growth Trust shareholders voted against the plans. Overall, 34.4 per cent of votes were in favour and 65.6 per cent against.

The outcome is also a personal rebuke for Weinstein, who was one of the two candidates Saba has nominated to become directors of the trust’s board.

Trust chairman Tom Burnet said: ‘Faced with the threat to their investment posed by Saba’s proposals, shareholders have mobilised and acted decisively to protect their investment. The result is unambiguous and conclusive.’

Saba was dealt another blow half an hour later when Keystone, led by boss Karen Brade, also saw off its attempt to unseat the board. 

Again the US firm failed to attract much support from other shareholders, with more than 99 per cent of non-Saba investors voting against the plans.

Overall, just over 39 per cent of the votes cast were in favour compared to 60.5 per cent opposed.

The results are another defeat for the Wall Street raider after investors in the £1.3billion Herald Investment Trust, the largest target on Saba’s list, decisively rejected the proposals to clear out the board two weeks ago.

Three advisory firms have also told investors to oppose similar plans by Saba for the Edinburgh Worldwide Investment Trust (EWIT) in a vote next week.

Glass Lewis, ISS and PIRC have all recommended shareholders in the £739million trust vote against Saba’s proposals. 

In its report, Glass Lewis highlighted a ‘lack of detail’ surrounding Saba’s plans for the trusts, while PIRC said a takeover by the firm ‘could cause fees and costs from the company to rise significantly’.

Meanwhile, ISS said Saba had ‘not presented a compelling case for change’. EWIT chairman Jonathan Simpson-Dent said: ‘The message could not be clearer: reject Saba’s overt land grab.’

Around half of EWIT’s shares are held by small private investors. 

Their turnout will be crucial in deciding whether Saba’s plans succeed. Weinstein’s firm controls an estimated 21 per cent of the business. 

But he only needs 50 per cent of the voting shares to succeed, meaning investors who do not vote could hand Saba victory.