Saba pushes Schroder fund for 100% tender

SCP agrees to tender, facilitating Saba's exit in new win for the activist investor.

Schroder UK Mid Cap fund (SCP) is going ahead with a 100% tender offer amid talks with activist shareholder Saba Capital Management.

Saba, which currently holds a 19.5% stake in the company, confirmed it would support the tender offer proposal, vote in favour of the resolution at SCP's June 24 annual meeting, and tender its shares as well as commit to a three-year standstill agreement.

According to a Wednesday notice, SCP's board said "there is significant support for the ongoing future of the company from a wide range of shareholders," but that the tender offer would ultimately facilitate Saba's exit alongside any other eligible shareholders.

"After more than a decade trading at a discount, SCP shareholders now have the opportunity to exit at NAV. This is what happens when boards listen to shareholders and engage constructively," Saba Founder and CEO Boaz Weinstein said in a same-day press release, hailing the tender offer as "further evidence that the positive transformation of the UK investment trust industry is accelerating."

SCP's board said it would not be tendering any shares and that, in contrast, three directors would be adding to their existing holdings by buying an additional GBP120,000 ($161,000) worth of shares.

Saba, founded by Boaz Weinstein in 2009, has a long history of targeting closed-end funds like SCP, having fought proxy battles involving funds managed by firms like Nuveen and BlackRock. In the UK, Saba accumulated large stakes in multiple listed investment trusts and won board replacements, tender offers, managed wind-downs, and conversions from closed-end to open-end structures.

Shares in SCP have dropped 1% today to 706p per share.

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