REG - Baillie Gifford US - Proposed merger with Edinburgh Worldwide IT PLC

Baillie Gifford Us Growth TrustAnnouncement

02/12/2025 07:00

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RNS Number : 7850J  Baillie Gifford US Growth Trust PLC  02 December 2025

2 December 2025

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN
OR INTO, THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND
POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA),
AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, IN ANY
MEMBER STATE OF THE EEA OR IN ANY OTHER JURISDICTION IN WHICH THE SAME WOULD
BE UNLAWFUL

This announcement is not an offer to sell, or a solicitation of an offer to
acquire, securities in the United States or in any other jurisdiction in which
the same would be unlawful. Neither this announcement nor any part of it shall
form the basis of or be relied on in connection with or act as an inducement
to enter into any contract or commitment whatsoever.

This announcement contains information that is inside information for the
purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as
amended (the "Market Abuse Regulation"). The person responsible for arranging
for the release of this announcement on behalf of Baillie Gifford & Co
Limited, acting as corporate secretary.

Baillie Gifford US Growth Trust plc (USA)

Legal Entity Identifier: 213800UM1OUWXZPKE539

Proposed merger with Edinburgh Worldwide Investment Trust plc

Saba declines to support

The Board of Baillie Gifford US Growth Trust plc (the "Company") announces it
has been in active discussions in relation to a transformational merger
opportunity that would result in both a continuation and refinement of the
current investment strategy as well as a material cash exit opportunity for
all shareholders. At a meeting on 1 December 2025 (initially proposed on 24
November 2025) to sound out its support for the transaction, Saba Capital
Management LP ("Saba"), a 29% shareholder, advised that it would not.

The Directors firmly believe that the merger would be in the interests of all
shareholders, including Saba. However, due to the size of its holding, Saba is
able to block the requisite shareholder approvals. Notwithstanding Saba's lack
of support for the merger, the Board would like to consult with shareholders
more broadly on their views.

Background

On 18 December 2024, the Company was requisitioned by Saba to replace the
Company's independent Board of Directors with Saba's own nominees and gain
control of the Company with the intention of managing the Company themselves
with a new investment strategy. This requisition was resoundingly defeated at
the Requisitioned General Meeting held on 3 February 2025 with 98.5% of
non-Saba shareholders voting against the resolutions. Shortly after the
Requisitioned General Meeting, the Chair and Senior Independent Director of
the Company met with Saba. Saba proposed a further meeting later in the year.
Saba was offered meetings with the Chair and the Senior Independent Director
following the publication of the annual results in August and again following
the AGM in September, but declined without providing any substantive feedback
apart from indicating that it would only be interested in a meeting to discuss
any proposals that the Board may wish to put forward.

Furthermore, at the Company's recent AGM, without prior notice of its
intention, Saba voted its shares once again to remove all the Company's
Directors, this time not proposing any nominees of its own and therefore
threatening the Company with the unprecedented prospect of being in breach of
the Companies Act, the UK Listing Rules and its own Articles by leaving the
Company with no Directors. Such a situation would, of course, have had
significant negative consequences for all shareholders.

Since the Requisitioned General Meeting, the Board has worked tirelessly to
create a way forward that would be equitable and positive for all
shareholders, and has sought extensive feedback from shareholders to
understand their opinions. The Company's shareholders who have provided
feedback to the Company have been clear in their requests:

·      Shareholders have expressed strong support for the Company's
highly differentiated investment strategy which continues to perform well in
the current environment with NAV outperformance over 1 and 3 years over the
S&P 500 Index (total return in sterling) and a 207.8% NAV performance from
inception in March 2018 to 30 November 2025 (noting that the 5 year
performance figures have been more challenging, principally due to well
reported macroeconomic headwinds). Due to the illiquid nature of the Company's
private company investments, the investment strategy is not suitable to be
offered in an open-ended fund format.

·      Secondly, shareholders have encouraged the Company to consider
merger opportunities while being mindful of the above.

·      Thirdly, these shareholders been very clear that they do not want
to see any suggestion of a deal designed to benefit Saba over other
shareholders.

The Board has therefore negotiated and advanced a credible proposal to combine
with Edinburgh Worldwide Investment Trust plc ("EWIT"). Both companies have a
similar investment philosophy. In addition, there is a high commonality of
EWIT's portfolio with that of the Company: as at 30 November 2025, EWIT's
assets had c.75% North American geographical exposure, were c.22% invested in
private companies and included 8 investments in common with the Company,
accounting for c.31% of EWIT's assets.

Outline of proposal to combine with EWIT

The terms of the proposed merger, which would be undertaken through a scheme
of reconstruction of EWIT under section 110 of the Insolvency Act 1986 and
have been substantively agreed between the two Boards, include the below key
features:

·      Continue to invest predominantly in listed and private US
companies across the market capitalisation spectrum, reflecting the
complementarity of both companies' investment strategies.

·      Continue to be managed by Baillie Gifford & Co Limited
("Baillie Gifford").

·      Benefit from greater economies of scale that are expected to
result from the enlarged asset base, including cost efficiencies and greater
liquidity.

·      Continue to receive the benefit of Baillie Gifford's broader
ecosystem of knowledge, sourcing of new ideas and contacts in private company
investment; as well as benefiting from the considerable investment in the
necessary middle and back-office infrastructure required for private company
growth investing capabilities.

·      Both companies offering a cash exit for up to 40 per cent. of
issued share capital at a narrow discount to NAV (the level of the discount
being set having taken into account the illiquid nature of the companies'
private company investments).

·      Significant contribution from Baillie Gifford to the costs of
implementing the combination through a management fee waiver.

·      Intention to form a robust and efficient blended board with 6
directors on completion of the merger.

Tom Burnet, Chair of Baillie Gifford US Growth Trust plc, said:

"We are highly disappointed that Saba has chosen once again to impede other
shareholders by blocking the Board from credibly presenting a potential merger
opportunity that would result in a materially improved position for
shareholders of both companies. This potential merger opportunity includes the
offer of substantial liquidity for those shareholders who wish it.

"I and my fellow Directors have always been very clear: we want to protect and
create value for all our shareholders. That is our priority. We want to be
able to put proposals for a way forward which are fair and equitable to all
our shareholders. The Board remains determined in its commitment to act in the
interests of shareholders as a whole."

Enquiries:

Company

Baillie Gifford US Growth Trust plc

via Burson Buchanan

 

Panmure Liberum Limited

Alex Collins/Ashwin Kohli

info@panmureliberum.com

+44 (0)20 3100 2000

 

Burson Buchanan

Henry Wilson / Helen Tarbet

USA@buchanancomms.co.uk

+44 (0)20 7466 5000

 

Baillie Gifford & Co Limited, Company Secretary

trustenquiries@bailliegifford.com

+44 (0)800 917 2112

 

The information in this announcement is for background purposes only and does
not purport to be full or complete. No reliance may be placed for any purpose
on the information contained in this announcement or its accuracy or
completeness. The material contained in this announcement is given as at the
date of its publication (unless otherwise marked) and is subject to updating,
revision and amendment. In particular, any proposals referred to herein are
subject to revision and amendment.

The value of shares and the income from them is not guarantee and can fall as
well as rise due to stock market and currency movements. When you sell your
investment, you may get back less than you originally invested. Figures refer
to past performance and past performance should not be considered a reliable
indicator of future results. Returns may increase or decrease as a result of
currency fluctuations.

This announcement may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends", "may", "might",
"will" or "should" or, in each case, their negative or other variations or
similar expressions. All statements other than statements of historical facts
included in this announcement, including, without limitation, those regarding
the Company's or EWIT's respective financial positions, strategies, plans,
proposed acquisitions and objectives, are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and,
accordingly, the Company's or EWIT's actual future financial results and
operational performance may differ materially from the results and performance
expressed in, or implied by, the statements. These forward-looking statements
speak only as at the date of this announcement and cannot be relied upon as a
guide to future performance. Subject to its legal and regulatory obligations,
the Company expressly disclaims any obligations or undertaking to update or
revise any forward-looking statements contained herein to reflect any change
in expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based unless required to do so by
law or any appropriate regulatory authority.

Panmure Liberum Limited ("Panmure Liberum"), which is authorised in the United
Kingdom by the Financial Conduct Authority, is acting exclusively for the
Company and no-one else in connection with the proposed transaction, will not
regard any other person as its client in relation to the proposed transaction
and will not be responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing advice in relation to the
proposed transaction, or any of the other matters referred to in this
announcement. This does not exclude any responsibilities or liabilities of
Panmure Liberum under the Financial Services and Markets Act 2000, as amended,
or the regulatory regime established thereunder.

None of the Company or Panmure Liberum, or any of their respective affiliates,
accepts any responsibility or liability whatsoever for, or makes any
representation or warranty, express or implied, as to this announcement,
including the truth, accuracy or completeness of the information in this
announcement (or whether any information has been omitted from the
announcement) or any other information relating to any of them, whether
written, oral or in a visual or electronic form, and howsoever transmitted or
made available or for any loss howsoever arising from any use of the
announcement or its contents or otherwise arising in connection therewith.
Each of the Company and Panmure Liberum, and their respective affiliates,
accordingly disclaim all and any liability whether arising in tort, contract
or otherwise which they might otherwise have in respect of this announcement
or its contents or otherwise arising in connection therewith.

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