The board of the Edinburgh Worldwide Investment Trust has deployed its ultimate defence against an activist hedge fund’s relentless siege: a plan to liquidate itself on shareholders’ terms.
In an attempt to end a bitter 16-month campaign by New York-based Saba Capital, the trust’s directors announced they would offer to buy back 100% of its shares. The move is designed to give shareholders a clean exit while preserving their stake in its most valuable asset: a holding in Elon Musk’s SpaceX, which comprises 16.6% of the portfolio.
The ‘Nuclear Option’ to End a Protracted War
This “nuclear option” is the culmination of a grinding conflict. Saba Capital, founded by Boaz Weinstein, has made at least three attempts to seize control of the trust. Its most recent effort in January saw shareholders vote on a motion to install three Saba-nominated directors. While 94% of votes cast by other shareholders backed the existing board, Saba’s own 30% stake meant the final margin was a narrow 53% to 47%.
Undeterred by that defeat, Saba tabled an identical motion just three weeks later, set for a vote next month. In response, Edinburgh Worldwide’s chair, Jonathan Simpson-Dent, accused Saba of a “repeat smash and grab cycle” and declared the board had “reached the end of the road” with the activist’s “obsession to break the status quo”.
The proposed tender offer is the board’s answer. Shareholders who accept would receive approximately 85% of their investment in cash, at a price close to the trust’s net asset value (NAV). The remaining 15%, representing the value of the SpaceX holding, would be paid as deferred cash once that stake is sold in a future “crystallisation event”. The trust’s board has framed this as a key differentiator from Saba’s plans, which it claims would leave shareholders either forced to give up their SpaceX stake or “trapped in a Saba-controlled vehicle”.
The Activist and the Prize: SpaceX
At the heart of the battle is the immense potential value of SpaceX. The rocket company is reportedly considering a Nasdaq listing as early as June 2026, with some valuations estimated as high as $1.75 trillion. Edinburgh Worldwide’s board is betting that shareholders would rather wait for that potential windfall under the current stewardship than risk it with a new manager.
Their opponent, Boaz Weinstein, is a formidable and decorated activist. A former Deutsche Bank proprietary trader who became a managing director at 27 and a National Chess Master at 16, he has built Saba into a fund known for targeting closed-end funds trading at discounts. The firm was named “Activist Hedge Fund Manager of the Year” by Institutional Investor in both 2023 and 2024.
Saba’s broader strategy focuses on UK investment trusts trading at discounts to their NAV—a sector where the average discount currently sits at 12.5%. The firm has even launched an exchange-traded fund, the Saba Capital Investment Trusts UCITS ETF, to capitalise on this market. Its campaign against Edinburgh Worldwide began over a year ago as part of a broader assault on seven trusts, dubbed the “Miserable Seven” by Saba. That initial “big bang” approach failed, resulting in a 7-0 defeat as the targeted boards united to see off the threats.
A Call for Regulatory Change
The protracted struggle has highlighted what many see as a flaw in UK market rules. The Financial Conduct Authority (FCA) is now reviewing its Listing Rules in response to industry concerns about activist tactics. The core issue is that current regulations appear ill-equipped to handle minority shareholders who, like Saba, repeatedly challenge boards with proposals that have already been decisively rejected by other investors.
While regular trading companies have protections against perpetual siege from failed bidders, investment trusts currently lack similar defences. The FCA’s review, which aims to ensure strong shareholder rights while managing conflicts of interest, is expected to conclude with proposals by the end of the year—a timeline that will be too late to help Edinburgh Worldwide.
For now, the trust’s fate rests on the vote for its self-tender plan, which requires a simple majority and can proceed without Saba’s support. The market’s initial reaction was positive, signalling investor approval for a circuit-breaker to a costly and distracting conflict. Whether this drastic measure becomes a blueprint for other trusts under fire, or a cautionary tale, may depend on the outcome of the regulator’s long-term review.
