01 March 2023
Saba withdraws Candidates on Two ClearBridge Funds
THE FACTS
Saba Capital Management, L.P. (Saba) filed a series of SC 13D documents in late September and early October 2022, notifying ClearBridge MLP & Midstream Fund Inc. (CEM), ClearBridge MLP & Midstream Total Return Fund Inc. (CTR), and ClearBridge Energy Midstream Opportunity Fund Inc. (EMO) of its intention to nominate their candidates – Paul Kazarian and Pierre Weinstein – for election to the board of each fund at their respective 2023 annual meeting of stockholders. Saba held 5.1% of CEM, 10.1% of CTR, and 10.0% of EMO as of the original filings.
However, yesterday, Saba submitted separate SC 13D/A filings to CEM and CTR, notifying them of withdrawing the notice of intent to nominate Kazarian and Weinstein. No filings were submitted related to EMO.
The three funds are currently trading at a discount to net asset value of 13.62% for CEM, 16.61% for CTR, and 12.69% for EMO.
OUR TAKE
As of Feb. 28th, Saba had increased their holdings in CEM to 8.8% and 15.8% in EMO while the CTR position is virtually unchanged at 10.0%. Saba’s significant ownership stake in EMO could make it easier for them to win a proxy contest or leverage a settlement. Their large position in Templeton Global Income (GIM) seems to have proven successful in that lengthy battle. At the same time, its smaller positions in CEM and CTR would require more support from other activists or institutions to mount successful challenges.
The filings did not indicate that settlement agreements have been reached with any of the funds, but that is not surprising as activists and funds are not required to publish private agreements reached between the two parties. Time will tell why Saba withdrew its candidates from CEM and CTR while moving forward, at least for now, with an announced proxy contest at EMO.
Saba Capital Management, L.P. (Saba) filed a series of SC 13D documents in late September and early October 2022, notifying ClearBridge MLP & Midstream Fund Inc. (CEM), ClearBridge MLP & Midstream Total Return Fund Inc. (CTR), and ClearBridge Energy Midstream Opportunity Fund Inc. (EMO) of its intention to nominate their candidates – Paul Kazarian and Pierre Weinstein – for election to the board of each fund at their respective 2023 annual meeting of stockholders. Saba held 5.1% of CEM, 10.1% of CTR, and 10.0% of EMO as of the original filings.
However, yesterday, Saba submitted separate SC 13D/A filings to CEM and CTR, notifying them of withdrawing the notice of intent to nominate Kazarian and Weinstein. No filings were submitted related to EMO.
The three funds are currently trading at a discount to net asset value of 13.62% for CEM, 16.61% for CTR, and 12.69% for EMO.
OUR TAKE
As of Feb. 28th, Saba had increased their holdings in CEM to 8.8% and 15.8% in EMO while the CTR position is virtually unchanged at 10.0%. Saba’s significant ownership stake in EMO could make it easier for them to win a proxy contest or leverage a settlement. Their large position in Templeton Global Income (GIM) seems to have proven successful in that lengthy battle. At the same time, its smaller positions in CEM and CTR would require more support from other activists or institutions to mount successful challenges.
The filings did not indicate that settlement agreements have been reached with any of the funds, but that is not surprising as activists and funds are not required to publish private agreements reached between the two parties. Time will tell why Saba withdrew its candidates from CEM and CTR while moving forward, at least for now, with an announced proxy contest at EMO.