DEFA14A: BlackRock Defends Innovation and Growth Term Trust Against Saba Capital Takeover Attempt

BlackRock urges shareholders to vote on the WHITE proxy card to protect their income and investment in the BlackRock Innovation and Growth Term Trust (BIGZ) against a takeover attempt by activist hedge fund Saba Capital Management.

Summary

• BlackRock is actively defending its Innovation and Growth Term Trust (BIGZ) against a takeover attempt by Saba Capital Management.
• Saba is seeking to replace a majority of the Board and terminate BlackRock as the investment advisor.
• BlackRock argues that Saba's motives are self-serving and could harm shareholders by leading to loss of income, higher fees, riskier investments, poor performance, and potential liquidation.
• The Board unanimously recommends voting FOR the Board's nominees and AGAINST Saba's proposal using the WHITE proxy card.
• BIGZ has delivered a 13% return on market price year-to-date in 2024, outperforming 91% of its peers.
• The fund has bought back over $177 million of shares since inception, adding approximately $35 million in value.
• In 2033, shareholders will have an opportunity to receive 100% liquidity at net asset value via fund liquidation or tender offer.

Sentiment

Score: 7

Explanation: The document presents a defensive stance, highlighting the fund's positive performance while warning against the potential negative impacts of Saba's actions. The sentiment is moderately positive, aiming to reassure shareholders and encourage them to vote in favor of the current management.

Positives

• BIGZ has delivered a 13% return on market price year-to-date in 2024, outperforming 91% of its peers.
• The fund has bought back over $177 million of shares since inception, adding approximately $35 million in value.
• BlackRock has been a closed-end fund leader since 1988.
• A discount management program is in place to mitigate discounts through share repurchases.
• Shareholders will have an opportunity to receive 100% liquidity at net asset value via fund liquidation or tender offer in 2033.

Negatives

• Saba Capital Management is attempting to take over the Board and terminate BlackRock as the investment advisor.
• BlackRock claims that Saba's actions could lead to loss of income, higher fees, riskier investments, poor performance, and potential liquidation for shareholders.

Risks

• Saba Capital's involvement could lead to changes in investment strategy, potentially increasing risk and volatility.
• There is a risk of liquidation at 'fire sale prices' if Saba's agenda is successful, which could have tax consequences for shareholders.
• The fund's performance is subject to market conditions, and past performance is not indicative of future results.

Future Outlook

The document focuses on the upcoming vote and the potential outcomes based on the shareholders' decision regarding the Board nominees and the investment management agreement.

Management Comments

• The Board unanimously recommends voting FOR the Board's Nominees, who have created value for all shareholders.
• The Board unanimously recommends voting AGAINST Saba's proposal to terminate the investment management agreement with BlackRock.
• BlackRock believes that Saba's motives conflict with shareholders' best interests.

Industry Context

Activist investors targeting closed-end funds is a known strategy to unlock value by forcing fund actions such as liquidation, tender offers, or changes in management. This proxy fight highlights the ongoing tension between fund managers and activist shareholders seeking to influence fund strategy.

Comparison to Industry Standards

• The document states that BIGZ's 13% return on market price year-to-date in 2024, outperforming 91% of all closed-end funds. This suggests that BIGZ is performing well compared to its peers.
• Without more specific information on the fund's investment strategy and holdings, it is difficult to make a more detailed comparison to industry standards.

Stakeholder Impact

• Shareholders could experience loss of income, higher fees, riskier investments, poor performance, and potential liquidation if Saba's proposal is successful.
• BlackRock's reputation and management of the fund are at stake.
• The outcome of the vote will impact the fund's investment strategy and overall performance.

Next Steps

• Shareholders need to vote on the WHITE proxy card before the Annual Meeting on June 25th.
• Shareholders should contact Georgeson LLC with any questions about the proposals.

Key Dates

Keywords

BlackRock, BIGZ, Saba Capital, Proxy Fight, Shareholder Value, Closed-End Fund, Investment Management, Board Nominees, Activist Hedge Fund, Takeover Attempt