DEFC14A: Saba Capital Seeks to Shake Up BlackRock California Municipal Income Trust Board

Saba Capital is soliciting proxies to elect its nominees to the board of BlackRock California Municipal Income Trust and to terminate the current investment management agreement, aiming to address the fund's trading discount and governance issues.

Summary

• Saba Capital is seeking shareholder support to elect two nominees, Shavar Jeffries and Ilya Gurevich, to the BlackRock California Municipal Income Trust's Board of Trustees at the upcoming 2024 annual meeting.
• Saba is also proposing the termination of the investment management agreement between the Fund and BlackRock Advisors, LLC.
• Saba believes the current board needs fresh perspectives to address the Fund's trading discount and corporate governance issues.
• The proxy solicitation is being made by Saba Capital, not by the Board or management of the Fund.
• Saba is urging shareholders to vote FOR its nominees and FOR the termination of the management agreement using the GOLD proxy card.
• Saba Capital currently beneficially owns 5,239,568 Common Shares, representing 17.43% of the outstanding Common Shares.
• The election of trustees requires the affirmative vote of a plurality of the shares represented in person or by proxy at any meeting at which a quorum is present.
• The approval of the proposal to terminate the management agreement requires the affirmative vote of a majority of the outstanding voting securities of the Fund.

Sentiment

Score: 7

Explanation: The document reflects a determined effort by Saba Capital to influence the direction of the fund, indicating a moderately positive outlook for potential changes and value creation, but also acknowledges the challenges and uncertainties involved.

Positives

• Saba believes its nominees possess the necessary experience and skills to address the Fund's challenges.
• Termination of the management agreement could lead to the appointment of a new manager with potentially more attractive terms.
• Saba Capital is willing to assist the Board in finding a capable manager and may offer its services as an interim or long-term manager.
• Shareholders have the final say on the appointment of any long-term manager.

Negatives

• There is no assurance that the Nominees will be elected or that they will be able to implement changes without the support of the other board members.
• The Fund's Board and management may oppose Saba's proposals.
• The Fund has a large and persistent trading discount and anti-shareholder governance practices.

Risks

• The Fund may incur costs in connection with the proxy contest.
• The election of Saba's nominees does not guarantee improved performance or a reduction in the Fund's trading discount.
• Termination of the management agreement could disrupt the Fund's operations.
• There is no guarantee that a suitable replacement manager can be found on attractive terms.

Future Outlook

Saba Capital intends to supplement the Proxy Statement with the date, time, and location of the Annual Meeting and the Record Date once the Fund publicly discloses such information.

Management Comments

• We are convinced that NOW is the time to take action to close the Funds discount and we urge shareholders to support the Shareholder Proposal and to elect the Nominees, who we believe, if elected, would serve the best interests of all shareholders.

Industry Context

Activist investors like Saba Capital often target closed-end funds to address issues such as trading discounts and governance practices, aiming to unlock shareholder value.

Comparison to Industry Standards

• Proxy fights are a common tactic used by activist investors to influence the direction of investment funds.
• Saba's approach is similar to other activist campaigns, focusing on board representation and management changes to improve fund performance.
• Other activist investors, such as Bulldog Investors, have also targeted closed-end funds with similar strategies.

Stakeholder Impact

• Shareholders may benefit from a reduction in the Fund's trading discount and improved governance.
• The Fund's current management and Board may face changes if Saba's proposals are successful.
• A new investment manager could be appointed if the management agreement is terminated.

Next Steps

• Shareholders need to vote using the GOLD proxy card.
• Saba Capital will supplement the proxy statement with the date, time, and location of the Annual Meeting and the Record Date once the Fund publicly discloses such information.
• The Fund will hold its Annual Meeting of Shareholders.

Key Dates

Keywords

proxy solicitation, Saba Capital, BlackRock California Municipal Income Trust, investment management agreement, board of trustees, shareholder proposal, corporate governance, closed-end fund