Baillie Gifford US Growth Trust shareholders reject Saba appointments

Baillie Gifford US Growth Trust PLC on Friday announced that at its annual general meeting, shareholders rejected the appointment of three directors that activist investor Saba Capital Management LP had sought to bring to the board.

However, the activist investor blocked the approval of share buybacks.

The US growth stock-focused investment trust, whose investees include Space Exploration Technologies Corp, said that the three resolutions to appoint Jason Chen, Thomas McGlade and James Waterlow were rejected with about 53% of votes cast against and 47% of votes cast in favour.

It noted that when excluding the votes of Saba and Sessa Capital IM LP, 99.2% of the votes cast were against the nominees. Sessa Capital, like Saba, is a New York-based hedge fund that has coordinated activist campaigns against London-listed companies.

As of September 25, Saba has a stake of 29.87% in Baillie Gifford US Growth Trust, while Sessa has a stake of 7.7%, giving them a combined stake of around 37.6%.

Meanwhile, the AGM did not pass its special resolutions, which the company said was almost entirely attributable to Saba and Sessa. One special resolution aimed to approve directors to allot C shares or sell treasury shares on a non-pre-emptive basis. Another special resolution sought to approve share buybacks.

Baillie Gifford US Growth Trust Chair Tom Burnet said: "On behalf of the board, I would like to pass our gratitude to our independent shareholders for their continued support.

"Those shareholders have again delivered a clear and decisive verdict. They have overwhelmingly rejected Saba's nominees. For the third time, they have also expressed their clear support for the current board.

"Repeatedly revisiting matters on which almost all of our independent shareholders have plainly already expressed their view places an unnecessary burden on the company, diverting management time and resources from the delivery of the company's strategy and the creation of long-term shareholder value and incurring significant costs."

Saba in recent months has shown increased interest in several London-listed companies.

In December last year, Saba had blocked a proposed merger between Baillie Gifford US Growth Trust and Edinburgh Worldwide Investment Trust PLC, also managed by Baillie Gifford.

Saba took control of Edinburgh Worldwide in April, ousting its board after a stand-off that lasted more than a year.

In June, Saba successfully appointed its nominees to the board of another FTSE250 listing, Impax Environmental Markets PLC.

Baillie Gifford US Growth Trust shares rose 1.0% to 360.50 pence each on Friday afternoon in London.

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