Workspace Urges Shareholders to Reject Saba's 'Short-Sighted' Boardroom Proposals

Workspace is urging its shareholders to vote against proposals from activist investor Saba that aim to force a sell-off of its properties and appoint new directors. The real estate investment trust (REIT), which has seen its shares trade significantly below net asset value for years, is preparing for its annual general meeting later this month.

Saba, led by New York financier Boaz Weinstein, has been acquiring stakes in various UK investment trusts and campaigning for control of their boards. The firm has recently succeeded in taking over Impax Environmental Markets Trust and Edinburgh Worldwide Investment Trust. Now, Saba has turned its attention to REITs like Workspace, advocating for reforms to its strategy and board.

Weinstein stated earlier this week that Saba's proposed dispose-and-repurchase strategy would yield higher returns than Workspace's current turnaround plan. According to Saba, Workspace shares are trading at approximately 50% below their net asset value, the largest discount among UK REITs, following a 48% total shareholder loss over the past five years. Saba has also nominated six candidates for the Workspace board, having recently increased its stake in the company to over 28%.

Workspace has characterized Saba's plan as "high-risk, short-sighted and not suitable for Workspace." The company is advising investors to vote against Saba's proposals and to re-elect all current directors. Workspace expressed concerns that Saba's nominees, who it claims have "limited" real estate investment experience, could lead to value destruction through a forced sell-off program. The flexible office provider believes that accelerating or increasing property disposals, as advocated by Saba, is unrealistic in the current market and would position Workspace as a forced seller, likely resulting in wider discounts.

Workspace also disputed Saba's assertion that the company had sold 13 properties at an average discount of 7.2% to their book value. The REIT clarified that the final valuation before sale often reflected the bid levels received, and the average discount to the sale price, based on valuations six months prior, was 19.6%.

In a separate development, the Financial Conduct Authority announced plans last month to prevent a director nominated by Saba from voting as the new investment manager. Saba maintains that its nominees for the Workspace board are "wholly independent."