Saba touts "liquidity win" as Schroder UK Mid Cap plans tender offer

(Alliance News) - Schroder UK Mid Cap Fund PLC on Wednesday announced a proposed 100% tender offer, which activist investor Saba Capital Management LP has agreed to support.

As well as tendering all of its shares, and voting for the relevant resolution at a general meeting scheduled for June 24, Saba has committed to a standstill agreement lasting three years, Schroder UK Mid Cap noted.

Saba, which holds a 19.5% stake in Schroder UK, will under the agreement be restricted from taking certain activist actions such as seeking to replace the board, voting against the board's recommendations and convening a general meeting.

"We are pleased to have reached agreement with Saba to facilitate their exit, allowing us to focus on our differentiated proposition going forward," Schroder UK Chair Harry Morley commented.

Schroder UK's directors will not tender their shares, the firm said, although three intend to buy additional shares worth GBP120,000 in total.

The mid-cap equities investor, which aims to provide a total return in excess of the FTSE 250 (ex-Investment Companies) Index, said its portfolio performance has been strong over the one, five and ten years ended March 31. Its NAV total return has outperformed the benchmark by 4.3%, 2.5% and 18.5%, respectively, it noted.

"The UK Mid Cap equity space remains one of the most dynamic parts of the investable landscape and with our talented portfolio management team at Schroders, we are confident of the company's future ability to generate attractive total returns for our shareholders," Morley said.

Saba, meanwhile, hailed its "significant liquidity win", which "marks the eighth successful outcome from the nine UK investment trust campaigns Saba launched in 2024 and 2025."

"After more than a decade trading at a discount, SCP shareholders now have the opportunity to exit at NAV. This is what happens when boards listen to shareholders and engage constructively," commented Saba Founder & Chief Investment Officer Boaz Weinstein. "It is more than just a victory for all SCP shareholders – it is further evidence that the positive transformation of the UK investment trust industry is accelerating."

Schroder UK Mid Cap said it expects the tender offer to complete in early August.

Shares in the company were down 0.4% at 710.00 pence in London on Wednesday afternoon.

By Emma Curzon, Alliance News reporter

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Schroder UK Mid & Small Cap Fund