The board of directors of the Gore Street Energy Storage trust have released an RNS, unanimously recommending shareholders vote against US activist Saba Capital’s “value-destructive” proposals.
Saba Capital holds an approximate 18.1% stake in the company at the time of writing and has proposed two resolutions for the firm’s upcoming AGM, currently set for 16 September.
Under Saba’s proposed resolutions, the trust would cease to exist as an investment company. If this passed, within three months the directors would be required to put forward proposals for a wind-up, liquidation or some other form of reorganisation.
Angus Gordon Lennox, chair of the trust, said: “We are concerned about the future of the company and the value-destructive impact should the Saba resolutions pass.”
He argued that earlier this year, the board had established its updated strategy, during which it considered all options including a managed wind-down, but judged an entire portfolio sale as too challenging in current market conditions and a poor route to delivering shareholder value.
“Instead, the board outlined a clear plan to augment the portfolio, alongside selective asset sales and distributions to shareholders to reward them for their patience while this took place, with clear and strict KPIs in place to measure the Investment Manager’s progress and ensure alignment.”
Voting for Saba’s proposals risks value destruction for several reasons, according to the board. It would guarantee accelerated sales at a low point in the cycle, would disrupt existing sales and the potential value of those sales, and ignores the fact that mechanisms to hold the board to account already exist thanks to the updated strategy, according to the RNS.
“We therefore urge shareholders to vote against the Saba resolutions,” Lennox continued.
David Batchelor, senior analyst at QuotedData, said: “GSF’s new board has been in place for five months and has moved quickly to establish a sensible strategy, which it is now implementing.”
With recent transactions and further disposals on the way, there is seemingly good value in the portfolio, he said.
“We agree with Saba that GSF’s discount is too wide, but its attempt to force a wind-down at this point is way too short-term in our view, and risks eroding significant value by turning GSF into a forced seller.”
At the time of writing, the trust trades at a 35% discount and has lost investors’ money in total return terms over the past one, three and five years, according to data from FE fundinfo.
“We think shareholders will be better served by giving GSF’s refreshed board time to implement its strategy, noting that shareholders also have the backstop of a continuation vote if the board misses its stated KPIs,” Batchelor concluded.
See also: Saba requisitions Baillie Gifford US Growth Trust
Meanwhile, Ben Yearsley, director at Fairview Investing, was more critical of the comments from Gore Street.
“Gore Street has had an unhappy few years with the share price languishing and the NAV falling,” Yearsley commented. “I don’t think the board or manager has covered itself in any glory over the last few years – the relationship appeared strong before a board refresh in 2025.”
Additionally, Yearsley questioned Gore Street’s decision to keep the terms of a related party sale confidential, after it announced last week that the trust had sold two of its Irish projects to GS EU, a fund managed by GSF’s manager Gore Street Investment Management.
“Saba clearly wants to make money, and bearing in mind they are likely to be underwater currently, why would they want to destroy any more value?”
