Board Recommends Shareholders Stand Firm

The board of the Edinburgh Worldwide Investment Trust (EWI) has issued a strong recommendation to its shareholders, urging them to reject an unsolicited takeover bid from activist hedge fund Saba Capital Management. The board argues that the offer significantly undervalues the trust's long-term growth prospects and its unique portfolio of global growth companies.

Defending Long-Term Strategy

In a statement to the market, the trust's directors emphasized their commitment to the current investment strategy, which focuses on identifying and backing innovative, high-growth businesses across the globe, particularly in the technology and healthcare sectors. They contend that Saba's bid is opportunistic and fails to recognize the inherent value being built for shareholders through this disciplined, long-term approach.

The board highlighted several key points in its defense:

  • The bid price is at a substantial discount to the trust's estimated intrinsic net asset value.
  • Saba's short-term financial engineering approach is misaligned with the trust's long-term investment horizon.
  • Liquidating the portfolio in the current market would realize suboptimal value for shareholders.

Shareholder Decision Ahead

The recommendation sets the stage for a potential showdown with Saba Capital, known for its aggressive campaigns against closed-end funds trading at discounts. Shareholders will now weigh the board's defense of independence and strategy against Saba's offer and its critique of the trust's performance and discount. The outcome will be a significant test of shareholder confidence in the current management's vision.