Spoken Like a True Financial Rebellion: Saba vs. Herald Investment Trust
Shareholders of Herald rebuff Saba's proposal. Will other investment trusts mimic this decision?
In a remarkable showdown, the Herald Investment Trust (LON:HRIL) has stood firm against Saba Capital's attempts to shake up its leadership.
A whopping 65% of votes, totaling 26.4 million, were cast against Saba's proposals to invoke a board change, with an astounding 99.78% of non-Saba shareholders backing the existing board. Andrew Joy, the chairman of Herald, applauded the Shareholders' decision, stating, "We're grateful for the support of our shareholders, both large and small. The vote clearly shows that Saba's self-interested proposals were rejected."
Richard Stone, chief executive of the Association of Investment Companies (AIC), hailed the result as a "victory for shareholder democracy." Yet, Saba Capital remains undeterred and plans to take on the leadership of the remaining six trusts.
Meanwhile, Saba Capital, along with Chief Investment Officer Boaz Weinstein, has previously justified their activities by claiming they've already benefited shareholders. In response to the Herald vote, Saba released a statement emphasizing the need for their presence in the market.
On the other hand, Darius McDermott, managing director at Chelsea Financial Services, expressed optimism, stating, "Investors need to build on the positive momentum."
The drama doesn't stop here; Saba Capital has waged a similar campaign in the US, targeting ten close-ended funds managed by BlackRock. As of now, eight funds have voted against Saba's proposed board candidates, while two have settled for tender offers for shares at 99.5% of net asset value per share.
shareholders of the targeted UK trusts should take a cue from Herald's resolute vote and prepare for the upcoming voting dates.
Saba's ongoing crusade for investment trust governance reforms reached a significant milestone when they successfully gained shareholder approval to expand ASA Gold and Precious Metals Limited’s board and elect Maryann Bruce as an independent director, breaking an existing deadlock. This move reflects Saba’s resilience and unwavering determination, particularly after being faced with rejection at Herald Investment Trust.
In summary, although Saba suffered a setback at Herald Investment Trust, their success at ASA Gold and ongoing campaigns illustrate their tenacity in pursuing governance reforms within investment trusts. This seesaw battle between Saba Capital and Herald Investment Trust serves as a fascinating study in corporate power dynamics and shareholder activism.
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References:[1] Herald Investment Trust PLC - Shareholder Vote on Saba's Requisitioned Resolutions[2] ISS Voting Guidelines - Herald Investment Trust[3] Glass Lewis Voting Recommendation - Herald Investment Trust[4] Saba Capital Management Announces Settlement Agreements with certain BlackRock Closed-End Funds[5] ASA Gold and Precious Metals Limited - Shareholder Vote Results on Saba Proposals
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- In light of Saba Capital’s unsuccessful attempt to change the leadership of Herald Investment Trust, shareholders of targeted UK investment trusts are advised to follow Herald's resolute approach and prepare diligently for the upcoming voting dates.
