Saba declines near-NAV tender for 29% of US Growth Trust

Baillie Gifford offered a cash tender to all shareholders of its US Growth Trust that would have allowed holders to sell at about 99.75% of net asset value. Saba Capital, which holds roughly 29% of the trust, chose not to take part in the offer.

The investment manager plans to publish governance and proxy documents this week setting out its response to Saba’s campaign. Baillie Gifford has described the tender as a mechanism to let investors realise near-NAV value and says the terms were extended equally to the trust’s shareholder base.

Saba, led by Boaz Weinstein, has nominated three candidates for the trust’s board: Jason Chen, Thomas McGlade and James Waterlow. The hedge fund has argued that shareholders have been disadvantaged by the trust’s management and accused incumbent directors of prioritising the manager’s interests.

Baillie Gifford has argued that appointing directors backed by Saba would weaken the board’s independence. The manager intends to set out its full defence in the documents to be published, including details of the tender terms and its assessment of the nominated candidates.

The dispute forms part of a wider campaign by Saba targeting listed investment trusts, where the fund has pressed for measures to reduce persistent discounts between share prices and underlying net asset values. Saba has built sizable positions in multiple UK investment companies and has sought board changes at several funds. In April, Saba succeeded in removing the board of another Baillie Gifford-managed trust, Edinburgh Worldwide Investment Trust.

Baillie Gifford US Growth holds a mix of public and private assets, including stakes in private companies such as SpaceX. Neither Baillie Gifford nor Saba has provided detailed public comment on the correspondence and offers ahead of the manager’s planned disclosures. The forthcoming documents are expected to set out the manager’s case and the options it believes are in shareholders’ interests.