Response to Saba Capital Management
07/11/2023 16:03
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RNS Number : 6847S European Opportunities Trust PLC 07 November 2023
EUROPEAN OPPORTUNITIES TRUST PLC
("EOT" or the "Company")
Response to Saba Capital Management
The Board of EOT notes Saba Capital Management's ("Saba") publication of a
letter regarding its opposition to the proposed tender offer the Company
announced on 6 November.
The Board believes that the 50% tender offer suggested by Saba would not be in
the best interests of the majority of shareholders at this time and affirms
its position in recommending that a 25% tender offer be implemented following
the Company's Annual General Meeting on 15 November. The proposed tender offer
would allow the Company to maintain a viable size of assets under management
for ongoing shareholders, whilst accommodating the desire of some shareholders
to reduce their holding at a price close to NAV. The Board's priority is to
consider and act in the best interests of all its shareholders.
The Board believes Saba's contention - that the completion of the 25% tender
offer would lead to a widening of the discount to NAV "to at least 15% - a
level common in UK investment trusts that do not have a continuation vote" -
to be conjecture. Furthermore, the Board reiterates that, in accordance with
the Company's articles of association, the Company will put a further
Continuation Vote to the 2026 Annual General Meeting and again to the Annual
General Meeting every three years thereafter.
The Board of EOT remains confident in the Company's long term investment
strategy. The portfolio manager embraces a high conviction approach, selecting
companies which he believes are differentiated and have the balance sheet
strength, cash flows and exposure to enable them to flourish in a range of
economic scenarios and provide superior returns to investors over the medium
and long term. The Board believes that this approach offers shareholders
access to attractive medium- and long-term growth opportunities though a
differentiated investment strategy with a strong long-term track record.
The Board continues to be proactive in implementing measures to create value
for shareholders, improve liquidity and reduce the discount to NAV, including:
· a substantial ongoing share buyback programme with the stated
purpose of maintaining the discount to NAV in single digits in normal market
conditions;
· recent material reductions in the fees payable to the Investment
Manager (and the removal of the former performance fee arrangement in 2019);
· the introduction of proposals for the forthcoming tender offer
for 25% of shares in issue; and
· the recent introduction of a conditional tender offer for a further
25% of shares in issue by references to the Company's performance over the
three financial years ending 31 May 2026.
As previously communicated, the Board of EOT believes that the continuation of
the Company is in the interests of shareholders as a whole and, following
active engagement with and careful consideration of feedback from a range of
shareholders, understands that the majority of shareholders wishes to see the
Company continue. The Board notes that both Institutional Shareholder Services
(ISS) and Glass Lewis have recommended that shareholders vote in favour of the
Continuation Vote.
For further information, please contact:
Company Secretaries enquiries@devonem.com
Richard Pavry / Charles Bilger +44 (0)20 3985 0445
Singer Capital Markets - Corporate broker
Robert Peel / Angus Campbell (Investment Banking) +44 (0)20 7496 3000
Alan Geeves / James Waterlow / Sam Greatrex (Sales)
Buchanan Communications - PR Adviser eot@buchanancomms.co.uk
Henry Wilson +44 (0)7788 528143
Helen Tarbet +44 (0)7872 604453
George Beale +44 (0)7450 295099
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