Saba says CQS Natural to launch tender offer amid 'standstill' deal
CQS Natural Resources Growth & Income PLC will conduct a tender offer and the investor in mining and resource-focused equities will boost its dividend going forward, Saba Capital Management LP said on Wednesday, as it hailed a ‘standstill agreement’ between the duo.
New York-based hedge fund manager Saba said Wednesday that CQS Natural, or CYN, will make a 100% tender offer for the trust’s share capital. Following this, the trust will adopt an enhanced annual dividend of around 8%.
The tender offer will give shareholders the option ‘of taking a full cash exit or remaining invested in CYN with an enhanced dividend and lower management fee’.
Saba said CQS Natural’s investment management fee has been reduced by 20 basis points.
Saba has said it will vote in favour of this plan, and tender all its shares in CQS Natural.
This plan is the result of a strategic review by CQS Natural, following some pressure from Saba. Back in December, Saba requisitioned a meeting of CQS Natural shareholders, proposing that Saba representatives replace the trust’s existing board.
CQS Natural reported that over 59% of shareholder votes were cast against Saba’s resolutions. CQS Natural was among seven UK trusts that had received scrutiny from Saba.
Saba submitted another proposal, which CQS Natural maintained was ‘without merit’. However, Saba withdrew a second meeting requisition to allow for a strategic review..
‘Today’s agreement with CYN highlights that meaningful, shareholder-friendly reform in the UK trust sector is not only possible - it’s happening,’ commented Saba Chief Investment Officer Boaz Weinstein.
‘This outcome gives CYN shareholders a clear choice: full liquidity at NAV or the opportunity to stay invested in a trust with a higher dividend and a reduced management fee.’
‘We’re proud to drive this transformation and remain committed to securing similar value-enhancing results for shareholders industry-wide,’ Weinstein added.
CQS Natural shares were up 3.4% at 202.20 pence each on Wednesday afternoon in London.
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