DEFC14A: Saba Capital Seeks to Shake Up BlackRock Health Sciences Term Trust Board, Urges Shareholders to Vote for Nominees and Management Agreement Termination

Saba Capital is soliciting proxies to elect its nominees to the BlackRock Health Sciences Term Trust board 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 three nominees to the board of BlackRock Health Sciences Term Trust at the upcoming 2024 annual meeting.
• The goal is to bring fresh perspectives to address the fund's trading discount and corporate governance issues.
• Saba is also proposing the termination of the investment management agreement between the fund and BlackRock Advisors, LLC.
• Saba believes the current board and management are not adequately addressing the fund's challenges.
• The proxy statement outlines the qualifications of Saba's nominees: Ilya Gurevich, Shavar Jeffries, and David Locala.
• Saba currently owns 20,538,431 common shares, representing 19.28% of the outstanding shares.
• Saba urges shareholders to vote 'FOR ALL' of its nominees and 'FOR' the termination of the management agreement using the GOLD proxy card.
• The annual meeting date has not yet been publicly disclosed by the fund.

Sentiment

Score: 7

Explanation: The document is assertive and confident in its stance, advocating for change and highlighting perceived shortcomings in the current management. While critical of the existing situation, the tone is professional and focused on improving shareholder value.

Positives

• Saba's nominees bring diverse experience in investment management, finance, education, and corporate governance.
• Terminating the management agreement could lead to a new manager being appointed on more attractive terms.
• Saba is willing to assist the board in finding a capable manager and may offer its services as an interim or long-term manager.
• Saba's nominees are considered independent and not interested persons of the Fund within the meaning of section 2(a)(19) of the 1940 Act.

Negatives

• There is no guarantee that any of Saba's nominees will be elected to the board.
• If the management agreement is terminated, the fund may need to become internally managed if a new agreement isn't approved.
• Abstentions will have the same effect as votes against Proposal 1 and Proposal 2.

Risks

• The fund may solicit proxies with an opposition proxy statement and a white proxy card.
• The fund has not yet disclosed the record date for determining shareholders entitled to notice of and to vote at the Annual Meeting.
• The fund has not yet publicly disclosed the date, time and location of the Annual Meeting.

Future Outlook

Saba intends to supplement the proxy statement with the date, time, and location of the Annual Meeting and the record date for determining shareholders entitled to vote once the Fund publicly discloses this information.

Management Comments

• Saba believes that BlackRock and the Funds trustees must be held accountable for the Funds large and persistent trading discount and its anti-shareholder governance practices.
• Saba is 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

This proxy fight reflects a broader trend of activist investors seeking to improve the performance and governance of closed-end funds, often targeting funds with persistent discounts to net asset value.

Comparison to Industry Standards

• Saba Capital frequently engages in similar activist campaigns across various closed-end funds, often focusing on discount reduction and corporate governance improvements.
• Other activist investors, such as Bulldog Investors and Karpus Management, also target closed-end funds with similar strategies.
• The success of these campaigns varies, but often results in some form of change, such as board representation, tender offers, or fund liquidations.

Stakeholder Impact

• Shareholders could benefit from a reduced discount and improved fund performance if Saba's proposals are successful.
• The current management and board could face changes in their roles and responsibilities.
• The investment manager, BlackRock Advisors, LLC, could lose the management agreement.

Next Steps

• Shareholders need to vote using the GOLD proxy card.
• Saba will supplement the proxy statement with the date, time, and location of the Annual Meeting and the record date once disclosed by the Fund.
• The Annual Meeting will be held where shareholders will vote on the election of trustees and the termination of the management agreement.

Key Dates

Keywords

proxy solicitation, Saba Capital, BlackRock Health Sciences Term Trust, board of trustees, investment management agreement, shareholder proposal, nominees, corporate governance, discount, annual meeting