Workspace Group Urges Shareholders to Reject Saba Capital Board Proposals
Main Developments in the Workspace Group and Saba Capital Dispute
July 9 (Reuters) - UK's Workspace Group urged its shareholders on Thursday to vote against activist investor Saba Capital's proposals at its annual general meeting later this month, while backing its turnaround strategy and board.
Background on Saba Capital's Demands
Here are some details and context on Saba's demands from Workspace's board:
Saba Capital's Shareholding and Reform Demands
• Saba Capital, Workspace Group's second-largest shareholder with a nearly 27% stake, has repeatedly demanded reforms at the office-space provider, including changes to its strategy and board.
Workspace Group's Response to Saba's Proposals
• "(The) Board continues to firmly believe Saba's proposal to accelerate or increase the volume of disposals is unrealistic in the current market, and it positions Workspace as a forced seller and will likely result in wider discounts than we have recently achieved," Workspace said.
• "Saba's plan is high-risk, short-sighted and not suitable for Workspace," it added.
Workspace's Turnaround Strategy
• Workspace unveiled a "transformation to an earnings-focused business" strategy on June 10, reinvesting disposal proceeds in property upgrades to grow rental income.
Key Points of Disagreement
Disagreement Over Use of Disposal Proceeds
• "Whereas both Workspace and Saba agree that assets must be sold, we disagree fundamentally about what to do with the proceeds," Saba Capital said in a statement on Thursday.
Saba Capital's Proposed Use of Proceeds
• The proceeds should be used to buy back shares to create immediate and highly certain value for continuing shareholders, Saba said, reiterating that its strategy generates higher shareholder returns than the company's existing turnaround strategy.
Board Changes Proposed by Saba
• Saba has proposed six changes to the Workspace board, which the company has opposed and urged shareholders to vote against at its meeting due on July 23.
Additional Reporting
(Reporting by Prerna Bedi in Bengaluru; Editing by Rashmi Aich)
