Response to Saba Capital Management

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 Richard Pavry / Charles Bilger	[e-mail] [phone]
Singer Capital Markets - Corporate broker Robert Peel / Angus Campbell (Investment Banking) Alan Geeves / James Waterlow / Sam Greatrex (Sales)	[phone]
Buchanan Communications - PR Adviser Henry Wilson Helen Tarbet George Beale	[e-mail] [phone] [phone] [phone]

 

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