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Highlights

  • ESCT to conduct a tender offer for up to 42.5% of shares, subject to approval
  • Saba commits to tender over 115 million shares and observe standstill covenants
  • Tender offer includes both cash and in specie options for eligible shareholders

Saba Capital Management, L.P. ("Saba") has entered into a standstill agreement with The European Smaller Companies Trust PLC (LSE: ESCT), following a series of negotiations with the Trust’s Board. The agreement outlines a framework intended to offer liquidity to shareholders and outlines mutual commitments between the parties through 2028.

A central feature of the agreement is a proposed tender offer, subject to shareholder approval, for up to 42.5% of ESCT’s ordinary shares in issue. Shareholders listed on the register at 6:00 p.m. BST on 16 April 2025 will be eligible to participate. The tender offer will provide shareholders with an option to receive either cash or in specie consideration in exchange for their shares.

Saba, one of the Trust’s largest shareholders, has agreed to tender 115,386,122 of its shares in the offer. Additionally, it has committed to comply with a series of standstill provisions that will remain in effect until the conclusion of ESCT’s annual general meeting in 2028, unless certain conditions trigger an earlier termination under the agreement’s terms.

The announcement follows Saba’s broader campaign to influence corporate actions across several UK-listed investment trusts. According to Saba, ESCT is now the fifth trust to make changes following its engagement efforts. The firm has advocated for shareholder-focused reforms including enhanced liquidity and governance.