Baillie Gifford US Growth Trust holders face Saba's bid for three board seats on 23 October

Discount activism has a real function, and the Guardian's Nils Pratley concedes it. He wrote that Saba boss Boaz Weinstein "has disturbed the complacency that used to infect corners of the UK investment trust world" ^[1]. Boards now find it harder to do nothing when a share price sits at a wide discount to asset value for long periods ^[2]. The trade-off at Baillie Gifford US Growth Trust, known as USA, is between keeping that pressure and giving board seats to a holder whose plans Pratley says are largely unspelled ^[3].

At USA the discount is the weak point in Saba's case. The trust trades on a discount of about 3%, according to Pratley, while Saba's main US funds trade on far wider ones ^[4]. Saba's public line is that its nominees "would urge them to offer all USA shareholders a 100% cash exit at or near NAV" ^[5]. The USA board says it has already offered Saba a chance to leave at a price nearly equal to asset value, and that Saba declined ^[18]. The fight is over who sits on the board when an exit is arranged.

Saba's argument is that a cash exit is a liquidity event for everyone. Investec's reply is that "Saba offers no credible plan" and that holders are being asked to back "a conditional, non-binding liquidity proposal, with no roadmap for the future manager, strategy or governance" ^[6]. Pratley adds a suspicion, not a finding: that the nominees could try to appoint Saba as manager or fold USA into a Saba-managed vehicle ^[19]. He also notes that one nominee is a Saba employee and the other two are serial picks in Weinstein's campaigns ^[7].

The numbers on the register matter as much as the merits. Saba's near-30% plus the 7.7% held by Sessa Capital comes to roughly 37% to 38%, if Sessa votes with Saba ^[17]. Pratley calls Sessa an assumed sympathiser, so that sum is an assumption ^[8]. Broker Panmure Liberum put the consequence this way: "Not voting is a vote for Saba" ^[9].

Timing is tighter than the meeting date suggests. The AGM is on 23 October ^[10], but Pratley wrote that for holders on investment platforms the effective voting deadline can be as soon as Wednesday, and he named Hargreaves Lansdown, AJ Bell and Interactive Investor ^[11].

In our view the evidence in the column favours the board. USA has returned 16.7% a year since its 2018 launch, beating the S&P 500 and sitting in the top 10% of UK investment companies, according to Pratley ^[12]. The weaker five-year figures, which he links to the pop in AI valuations in late 2022, are the opening Saba found ^[13]. The column does not include a reply from Saba, the terms of the board's offer, or the size of the board.

The result sets up the next quarter. If the nominees win seats, the cash-exit idea and the question of who manages the trust reach a board with Saba-aligned directors. If they lose, Saba still holds near-30% and has already come back after two earlier defeats ^[14].