Saba takes another hit at Edinburgh Worldwide

It appears that Saba, the activist investor, is preparing for another attempt to remove the board of a UK investment trust

Saba Capital, a New York-based activist investor, wrote to Edinburgh Worldwide's board on November 27th to express its intention to call a general meeting in order to reorganize the investment trusts board.

In December 2024, Saba saw a chance to take more control over seven investment trusts, including Edinburgh Worldwide. In order to replace the boards of directors with new appointments, including two of its own directors, the activist investor called general meetings at each of the seven in the first few months of 2025.

In its effort to replace the trusts boards, Saba cited alarming discounts to net asset value (NAV) and ongoing share price underperformance.

Saba's attempt failed because all seven investment trusts voted against it.

However, Saba's interest has now returned, at least in Edinburgh Worldwide.

The founder and chief investment officer of Saba Capital, Boaz Weinstein, wrote to the board of Edinburgh Worldwide, "We remain profoundly frustrated by the Board's prolonged inertia, especially given the decisive actions taken by the boards of several other UK investment trusts to increase share prices and narrow persistent discounts to NAV."

"The Company's Net Asset Value (NAV) return of -30.8 percent and Share Price return of -35.0 percent have significantly underperformed its self-selected benchmark, the FTSE All-Share Index (+71.4 percent), by more than 100 percentage points," Weinstein stated.

As a result, we will call a general meeting of the company to remove the entire current board and replace it with a new board made up entirely of independent, qualified directors who are dedicated to providing long-term value for all shareholders. A "

Edinburgh Worldwide, under the management of Baillie Gifford, was trading at a 5.1% discount to NAV as of November 26. After Sabas' letter, this decreased to 4.3 percent on November 27. The Association of Investment Companies (AIC), an industry association that represents investment trusts, reports that as of November 27, the average discount across all investment companies (apart from 3i, which is big enough to skew the data) is 13.5 percent.

Edinburgh Worldwide's (LON:EWI) shares ended the November 27 session up 0.7 percent.

In recent weeks, there have been indications that Saba is once again focusing on UK investment vehicles. Under pressure from Saba, Terry Smith, CEO and chief investment officer of Fundsmith, suggested earlier in November that the Smithson Investment Trust be changed into an open-ended fund.

Edinburgh Worldwide gives Saba a response.

Edinburgh Worldwide's board responded to Saba's announcement of its plan to call the meeting a few hours later, stating that it was disappointed that the activist investor was trying to remove the board once more.

"We are disappointed by Saba's open letter," stated Edinburgh Worldwide chair Jonathan Simpson-Dent. "Over the past year, we have made an effort to interact with Saba in order to comprehend their goals and to have a positive conversation about potential solutions for a fair and comprehensive solution, including a return of capital. The "

Simpson-Dent continued, "The Saba letter doesn't reflect the progress the board has made over the past year, during which its NAV total return has been 17.5 percent, compared to 4.8 percent for its benchmark, the SandP Global Small Cap Index."

Simpson-Dent stated, "The FTSE All-Share, the benchmark mentioned in Saba's open letter, is not EWIT's." The sell-side analyst community has pointed out that evaluating a global small-cap trust against a UK all-cap benchmark is illogical. The "

Additionally, he emphasized that the trust discount was "significantly narrower than the Global Smaller Companies peer group weighted average discount of 10.9 percent."

AIC: Voting by shareholders is crucial.

Early this year, when Saba tried to seize control of Edinburgh Worldwide and six other investment trusts, a surprisingly large number of shareholders turned out to exercise their right to vote.

The AIC has urged Edinburgh Worldwide's shareholders to make sure their opinions are heard once more.

"Voting by shareholders is crucial," stated Richard Stone, the CEO of the AIC. "It's critical that shareholders comprehend that they have the last say. Each and every vote matters. A "

The AICs provide information on voting procedures and how to attend general meetings.