(Reuters) -U.S. hedge fund Saba Capital Management will offer shareholders of UK’s Herald Investment Trust a full cash exit at 99% of their net asset value, it said on Thursday, as it sought to win their approval for a board overhaul.
Saba, founded and run by activist investor Boaz Weinstein, said last month it wanted to overhaul the boards of seven British investment trusts over performances it said ranged from “underwhelming” to “disastrous”.
“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,” the hedge fund said in a statement.
In a statement responding to Saba’s offer, Herald raised concerns it could destroy value.
“Saba is proposing an exit after ‘at least a year’ during which open-ended time period significant value could be lost from the underlying portfolio in anticipation or consequence of Saba’s known selling appetite,” it said.
The London-listed shares of Herald Investment Trust traded flat at 1346 GMT, paring earlier gains, after it issued the statement.
Saba’s plans, which include nominating Weinstein to the board of one fund and one of its lead portfolio managers, Paul Kazarian, to the other six funds’ boards, have faced resistance.
The other trusts it is targeting include Baillie Gifford US Growth Trust, CQS Natural Resources Growth & Income, Edinburgh Worldwide Investment Trust, Keystone Positive Change, Henderson Opportunities Trust and European Smaller Companies Trust.
(Reporting by Yamini Kalia in Bengaluru; Editing by Rashmi Aich and Barbara Lewis)
