‘A blow to British buyers’: US hedge fund raider claims second sufferer after assault on London-listed belief Impax

US raider Saba Capital has forced a second investment trust to propose drastic measures to avoid shareholders being trapped in the company if it succeeds in taking over the business.

The £782million Impax Environmental Markets trust, which backs companies focused on areas such as clean water and green energy, said it would offer shareholders the chance to sell their stock at close to the value of the firm’s assets to allow them to exit the company ahead of Saba taking control.

It followed a similar move by fellow trust Edinburgh Worldwide this month and was branded ‘a blow for the London stock market and British investors’.

Impax chairman Glen Suarez said the firm had been ‘forced to act’ after the US activist hedge fund, run by New York financier Boaz Weinstein, built up a 22 per cent stake in the business raising fears it will attempt to take over the company by voting to oust its board of directors.

‘Having exhausted every reasonable alternative and having received no guidance from Saba as to its voting or tendering position, the Board has been forced to act to protect non-Saba shareholders from the possibility of becoming trapped in a Saba-controlled company,’ Suarez added.

Earlier this month Edinburgh Worldwide also offered investors the chance to cash out after Saba attempted to oust its board twice only to be defeated by overwhelming opposition from other investors.

Impax shareholders will need to vote to approve the offer to cash out their shares at a meeting scheduled for April 16. The vote requires at least 50 per cent of investors to vote in favour.

The move sparked fury from investment trust industry experts, who have repeatedly accused Saba of trying to bulldoze its way into taking control of several London-listed trusts by repeatedly tabling votes to remove their boards in hopes other investors will not turn out to oppose them.

Richard Stone, head of industry body the Association of Investment Companies, said: ‘It’s infuriating that we could lose both Impax Environmental Markets and Edinburgh Worldwide because of one minority shareholder.

‘Saba has thwarted the interests of the majority of shareholders. They have refused a cash exit, and their actions suggest they are bent on taking control of these companies. 

‘But the majority of shareholders have voted for the continuation of these investment trusts in their current form.’

He added: ‘We need policymakers, regulators and the Takeover Panel to take action to prevent a minority shareholder from dictating the future of an investment trust and taking control of its management contract against the interests of other investors.

‘The priorities should be to protect board independence, strengthen the rules around conflicts of interest, and rethink the related parties rules.

‘Impax Environmental Markets and Edinburgh Worldwide are both FTSE 250 companies and highly valued by their shareholders. Losing these companies would be a blow for the London stock market and British investors.’