Following the receipt of a requisition request from Saba Capital Management, L.P. (click here to see our original coverage of this) Henderson Opportunities Trust (HOT) has published a notice for the requisitioned general meeting alongside a unanimous board recommendation to vote against all of the requisitioned resolutions.

In the process, the company has announced details of a proposed reconstruction and members’ voluntary winding-up of the company on which the board had instructed the company’s advisers to commence work before the requisition was received. The proposed scheme gives all shareholders the option to elect for an unlimited cash exit at NAV, or to roll over their investment into Janus Henderson UK Equity Income & Growth Fund, an open-ended fund.

Why you should vote against the resolutions in order to protect your investment

Saba, a US hedge fund manager, has requisitioned a general meeting of your company and put forward resolutions to remove the entire existing board and replace it with only two individuals, both nominated by Saba and one of whom is a partner at Saba. This will effectively give Saba executive control of your company, enabling it to steer and repurpose your company in a manner designed to serve its own interests.

Saba has also suggested that it could be appointed as your company’s new investment manager.

Saba has not guaranteed a cash exit for existing shareholders should it take control, unlike the full cash exit at NAV which is being offered to all shareholders by the existing board.

The board believes that:

Your opportunity for a full cash exit at NAV or a suitable rollover option (as is being offered by your current board) is at risk of being cancelled by Saba.

• Any potential exit opportunity under Saba, if one is offered at all, may be at a worse price and restricted to only a partial exit.
• This could be a significantly worse outcome than the unrestricted exit at NAV (either in the form of cash or a continued investment in an open-ended fund) currently on offer to shareholders.
• There may also be no rollover alternative provided by Saba to allow individual investors holding their investment outside of tax wrappers to plan for any personal chargeable gains tax liabilities.

Wendy Colquhoun, chairman of Henderson Opportunities Trust plc, said:

“We are asking our shareholders to vote against the resolutions proposed by Saba, which bring significant uncertainty and risk. The current independent board is offering shareholders the choice of a full cash exit at NAV or the option to roll over into an open-ended fund managed by Janus Henderson Investors. If Saba succeeds, this offer is at risk of being cancelled with no comparable substitute. Saba is attempting to take control of the company with no assurances as to what will happen to shareholders’ investments. Saba wants to remove a strong and highly qualified independent board that acts in the interests of all shareholders and replace it with its own non-independent board that may put Saba’s interests first.

The board’s message to shareholders is clear: please exercise your vote and don’t let Saba take unnecessary risks with your money.”

Notice of requisitioned general meeting

The circular contains a notice of requisitioned general meeting to be held at 201 Bishopsgate, London EC2M 3AE at 10:00 a.m. on 4 February 2025.

The circular for the proposed scheme will be published in early February 2025 with the two general meetings to approve the Scheme expected to be held in late February and early March 2025. If approved by shareholders, the effective date of the Scheme would be in early March 2025.

[QD comment (James Carthew) : You’ll already be well aware of our views on Saba’s proposals – make sure that you VOTE AGAINST – but the board’s proposals for the cash exit/rollover option sound perfectly sensible to me. It is only a shame that rollover is into an open-ended fund, but it is very unlikely that any investment trust would want to run the risk of Saba rolling its stake onto their register and stirring up more trouble – one more example of its unhelpful presence in our sector.]