- Trust to merge with reinsurer
- Majority of investors in favour
- Deal comes after Saba campaign
The impact of Saba’s Capital drive late last year to shake up the UK investment trust industry continues to reverberate, with a majority of shareholders approving plans for Third Point Investors (TPOU) to merge with Malibu Life Reinsurance instead of investing in Dan Loeb’s Third Point hedge fund.
Third Point Investors shares rose $0.10 or 0.4% to $25.80 suggesting the decision was more or less baked in beforehand.
DEAL TO DELIVER ‘SUPERIOR VALUE’
In December last year, activist investor Saba, managed by Boaz Weinstein, published an open letter calling for strategy reviews at a number of investment trusts, including Third Point Investors, after a prolonged period of underperformance.
Having agreed to undertake a review, founder and manager Dan Loeb proposed merging the UK trust with Malibu Life, a Cayman Islands-based reinsurance company set up last year, and ending its investment in Third Point LLC.
At yesterday’s EGM (extraordinary general meeting), the proposal was passed by a majority of shareholders, including Loeb’s hedge fund which owns a 25% stake in the trust, although a significant minority opposed the deal arguing in favour of a full cash alternative due to the trust’s radical change of strategy.
Rupert Dorey, chair of Third Point Investors, said the trust’s board had been ‘fully cognisant of its duty to the company and its shareholders as a whole’ and had come up with ‘an innovative solution that broke from the status quo (and) had the opportunity to deliver superior value for all shareholders’.
Dorey added: ‘Following extensive consultation with our shareholders, the board is delighted that a significant majority agree that the combination with Malibu represents a unique opportunity to bring a high-quality reinsurance platform to the London market that has the potential to deliver superior value for investors.’
