Saba's damaging proposals

European Smaller Companies Tst PLC

20 January 2025

 

JANUS HENDERSON FUND MANAGEMENT UK LIMITED

THE EUROPEAN SMALLER COMPANIES TRUST PLC

Legal Entity Identifier:  213800N1B1HCQG2W4V90

20 January 2025

THE EUROPEAN SMALLER COMPANIES TRUST PLC

("ESCT" or the "Company")

Saba's Damaging Proposals

The Board of The European Smaller Companies Trust PLC, formerly known as TR European Growth Trust PLC, has noted the announcement by Saba Capital Management, L.P. ("Saba") on 13 January 2025, the webinar it held on 14 January 2025 and the presentation it published on 16 January 2025, in which Saba has made clear its intentions while continuing to make misleading statements regarding your Company.

Saba intends to take effective control of your Company and drastically alter your investment exposure

·      Saba has confirmed its intention is to take over the management of your Company, with Saba being the beneficiary of the future fees it would earn as manager.

·      Saba intends to radically change your Company's investment strategy away from European small cap equities, at a time when the sector is attractively valued.

·      This means your Company would no longer invest in European smaller companies but would become an investment trust which will invest in other investment companies.

·      Shareholders may end up invested in a vehicle which no longer meets their investment objectives.

Saba continues to make misleading statements regarding your Company's performance

·      Saba's strategy is one of deliberate misdirection, by choosing to ignore the strong investment performance of the Company to advance its own agenda.

·      Your Company has outperformed its benchmark over one, three, five and ten years and since your current portfolio manager, Ollie Beckett, took over the management of the portfolio in 2011.

·      Your Company has generated NAV total returns of 51.6% over five years and 202.2% over ten years to 31 December 2024, delivering strong absolute and relative returns to shareholders over the long-term.

·      Your Company has introduced a policy of targeting a mid-single digit discount, in normal market conditions.

It is your Board's belief that Saba has targeted your Company, which has a long-term record of investment outperformance, because it believes that a sufficient number of shareholders will not vote, allowing it to obtain effective control so it can benefit from the future fees it would earn as manager.

Your Board unanimously recommends that shareholders VOTE AGAINST ALL Resolutions. The Requisitioned General Meeting will be held at 12.30 p.m. on 5 February 2025 at 201 Bishopsgate, London EC2M 3AE and the deadline for the receipt of proxies is 12.30 p.m. on 3 February 2025. However, shareholders voting via a platform should note that their deadline will be earlier than this.

James Williams, Chairman of The European Smaller Companies Trust PLC, said:

"Saba's intentions are now clear, they want to seize control of your company, appoint themselves as manager, profit from the prospective management fees and change the investment approach. This will deny shareholders the opportunity to benefit from a proven investment strategy in European smaller companies. It could also leave them invested in a vehicle which may be wholly unsuitable for their investment objectives.

"We encourage all the Company's shareholders to urgently review the circular. This contains the information necessary for you to make an informed decision as the outcome of the vote will impact your investment.  It is incredibly important that as many shares as possible are voted so that shareholders' wishes are made absolutely clear."

YOUR VOICE MATTERS:

STAND AGAINST SABA, SAFEGUARD YOUR INVESTMENT

Enquiries:

Janus Henderson Secretarial Services UK Limited

Corporate Secretary to The European Smaller Companies Trust PLC

 [phone]

Dan Howe

Head of Investment Trusts, Janus Henderson Investors

[phone]

Winterflood Securities Limited

Neil Langford / Rose Ramsden (Corporate Finance) 

Darren Willis / Innes Urquhart (Corporate Sales)

[phone]

Edelman Smithfield

John Kiely / Latika Shah

[phone] / [phone]

Georgeson

[e-mail]

IMPORTANT INFORMATION

This announcement does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or solicitation of any offer to subscribe for or to acquire, any ordinary shares in the Company in any jurisdiction.

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment, you may get back less than you originally invested. Figures refer to past performance and past performance should not be considered a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "might", "will" or "should" or, in each case, their negative or other variations or similar expressions. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, and objectives, are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. Subject to its legal and regulatory obligations, the Company expressly disclaims any obligations or undertaking to update or revise any forward-looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based unless required to do so by law or any appropriate regulatory authority.

 

END