Three key governance and shareholder activists — Glass Lewis, ISS and PIRC — say investors in the Baillie Gifford US Growth Trust should reject the resolutions from New York hedge fund Saba Capital.
Saba is making a third time, to replace the trust’s existing board at the fund’s AGM on 23 October.
The £1.1 billion Baillie Gifford US Growth Trust plc said: “”All three leading voting experts have recommended that shareholders vote against the Saba resolutions.
“Further, all three firms recommended that shareholders vote for re-appointing the existing directors.
“Industry-leading governance experts Glass Lewis, ISS and PIRC share the board’s concerns about the future of the company should the proposals put forward by Saba be voted through.”
Baillie Gifford US Growth Trust chairman Tom Burnet said: “Baillie Gifford US Growth has been a top decile performing investment trust since launch in March 2018 compared with all UK investment trusts and US equity funds.
“It has a proven track record of delivering strong value creation for shareholders through its high-conviction strategy. Further to that it has a distinctive proposition and an independent board with a wealth of expertise which is directly aligned with the company’s strategy of investing in exceptional public and private US growth companies.
“We are very pleased to see that all three major independent voting advisers have agreed with the Board’s unanimous recommendation to vote against the Saba Resolutions.
“These experts echo the board’s concerns that Saba’s proposals are inconsistent with appropriate standards of corporate governance and signal Saba’s intent on obtaining control of the company.”
Saba recently increased its stake to around 29.9%, just below the threshold at which it would be obliged to make a takeover offer for the trust. Fellow New York hedge fund Sessa Capital has also increased its stake to 7.7% ahead of the vote. It is believed Sessa will support Saba’s motion.
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