Saba suggests a share tender offer in the event that its bid for Edinburgh Worldwide is accepted

If its proposals for the investment trust's board are approved, the US-based activist investor appears to be offering Edinburgh Worldwide shareholders the opportunity to sell their shares at a price near NAV

On February 10, New York-based activist investing hedge fund Saba Capital Management announced that it would be replacing the board of Edinburgh Worldwide Investment Trust (EWIT) for the third time in just over a year.

A few days later, it made a follow-up proposal that seemed to be an attempt to win over EWIT's shareholders, who have so far overwhelmingly rejected its proposals. Saba now suggests that the new board offer current shareholders a 100% cash exit at 99% of the trust's net asset value (NAV) if its proposals are approved at the trust's next AGM.

On February 12, Saba issued a statement saying, "We acknowledge that shareholders would prefer the option to not continue with the company, even though we reiterate that the new Board will be fully independent from Saba." In light of this, we advise that the newly elected directors provide a 100% cash exit to all shareholders at 99% of the company's net asset value.

Edinburgh Worldwide's (LON:EWI) shareholders rejected Saba's proposals during a requisitioned general meeting in January 2026. The outcome of a similar proposal last February, in which Saba tried to replace the boards of seven UK investment trusts with nominees it had nominated, was mirrored in the vote.

The proposals received 98.4 percent of the vote last year and 92.07 percent this year (not including Saba's own votes), indicating that Saba was soundly defeated in both votes.

Why is Saba making a cash offer to the shareholders of EWIT?

According to Saba, EWIT has continuously underperformed relevant stock market indices. The investment trust's flagship holding, Elon Musk's SpaceX, was sold off improperly to make way for a merger with Baillie Gifford US Growth (LON:USA), another trust that is also managed by Gifford.

However, it has not been successful in getting EWIT shareholders to agree thus far.

"Only three weeks ago, a record 70 percent of shareholders participated in the second vote in less than a year, with an overwhelming majority (93 percent) of non-Saba holders again rejecting its proposals," an EWIT spokesperson said in reaction to the announcement that Saba was taking part in a third vote. "It is clear that Saba is refusing to pay attention in spite of this clear result and the adamant shareholder opposition to Saba assuming control.

With Saba proposing a new board of directors consisting of Gabriel Gliksberg, Michael Joseph, and Jassen Trenkow, the trust's shareholders seem hesitant to stick with an investment that might take a different course.

Does Saba have the potential to target other trusts?

Even though it seems like Saba is currently concentrating on EWIT, it owns sizeable stakes in other UK investment trusts, which has led to conjecture that more corporate actions may be on the horizon.

Two of these trusts have made an effort to prevent Saba from acting against their boards by putting their shares up for tender near NAV.

One of these, from Herald Investment Trust (LON:HRI), was rejected by Saba, resulting in the withdrawal of the tender offer on February 3. The board of Heralds is currently negotiating with Saba regarding a different proposal that would allow Saba to leave the trust and make it accessible to the hedge fund. The board has suggested a backstop tender offer with a lower voter threshold, which Saba could not effectively veto if an agreement cannot be reached.

On February 23, a general meeting of Impax Environmental Markets (LON:IEM), the other, is scheduled to vote on the tender offer.