The great advantage of hostile takeover battles for public companies is that you get a clean punch-up. The records of both parties – bidder and target – are put in the spotlight. Every claim is tested in open argument over many weeks. At the end of the process, shareholders make an informed choice. Voting turnout is usually high because only the most dozy investors fail to notice what’s at stake.
Unfortunately, the current scrap for control of seven UK investment trusts is not like that. That is most obviously the case because Saba, the US hedge fund led by Boaz Weinstein, is not making a takeover bid. Its proposal instead is to sack the boards of all seven trusts, install its own people, and, possibly, appoint itself as fund manager. So not a takeover – but very definitely an attempt by a minority shareholder (Saba has stakes in the seven trusts of between 19% and 29%) to seize control.
