A second investment trust has issued a tender offer, in response to pressure from activist investors Saba Capital.
Impax Environmental Markets announced an exit tender offer to shareholders today (March 17).
It comes a week after the Edinburgh Worldwide Investment Trust said it had been left with “no alternative” but to propose an exit solution, due to a “committed campaign” from activist investors Saba.
The board of the Impax trust said the decision had been made because Saba failed to tender their shares in a continuation tender offer put forward in January.
A spokesperson for Impax Asset Management said: “We believe that the board has been put in an impossible position and regret this course of events.
“Shareholders in Impax Environmental Markets plc chose to invest in an investment strategy that provides highly differentiated exposure to global markets and significant long-term value creating opportunities.”
In response to the news, the Association of Investment Companies called the possibility of losing two investment trusts “infuriating”.
Chief executive of the AIC, Richard Stone, said while Saba has refused a cash exit the majority of shareholders have voted for the continuation of the companies.
He said: “Impax Environmental Markets and Edinburgh Worldwide are both FTSE 250 companies and highly valued by their shareholders. Losing these companies would be a blow for the London stock market and British investors.”
Stone called for policymakers to “take action” to prevent minority shareholders from dictating the future of investment trusts.
James Carthew, head of investment companies at QuotedData, said the situations at both investment trusts were identical.
He added: “Saba, through its intransigence and determination to ride roughshod over the wishes of other shareholders, has brought about the end of a unique trust.
“In my view, IEM shareholders should vote in favour of the tender and tender all their shares. The likely alternative is Saba seizing control, appointing itself manager (probably on a higher fee if the charges on its ETF are anything to go by), and changing the mandate.”
The results of Impax Environmental Markets’ general meeting will be published on April 16.
tara.o’connor@ft.com
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