Saba Capital is set to exit its position in The European Smaller Companies Trust (ESCT) after an agreement with the investment trust’s board.
The trust will launch a tender offer for up to 42.5% of its shares in issue. As part of the deal, Saba will tender its 115,386,122 shares in the trust.
Meanwhile, the two parties have signed a standstill agreement, meaning Saba will be unable to requisition the ESCT board again until after the next AGM in 2028.
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ESCT was among the seven investment trusts initially targeted by Saba last December, with the activist investor calling votes to remove the boards at each trust.
With each proposal voted down by the respective shareholders, ESCT was also part of the next wave of requisitions by Saba, though none of those further actions came to a vote.
James Williams, ESCT chair, said: “This board believes this is the best course of action to protect the interests of those shareholders that wish to continue their investment in the company.
“It will allow the board and the manager to continue to focus on delivering value for shareholders through its proven investment strategy of disciplined, long-term investment in European smaller companies.”
Saba founder and CIO Boaz Weinstein added: “From the outset, our objective has been clear: to unlock value for shareholders across the UK investment trust sector. Today’s agreement marks a significant step in that direction, providing those ESCT shareholders that wish to exit their investment with the opportunity to do so through a substantial tender offer.
“ESCT now becomes the fifth trust, of those we requisitioned general meetings at, that has taken decisive, shareholder-friendly action following our engagement. This milestone underscores the positive and transformative impact we have had on the sector.”