DEFA14A: BlackRock Receives Support from Glass Lewis in Proxy Fight Against Saba Capital

Glass Lewis recommends shareholders vote for BlackRock's board nominees and against Saba Capital's proposals to terminate BlackRock as investment adviser for ten closed-end funds.

Summary

• BlackRock has received recommendations from Glass Lewis to re-elect all of its board nominees and reject all proposals from Saba Capital Management to terminate BlackRock as the investment advisor for ten closed-end funds.
• Glass Lewis recommends shareholders vote on the WHITE proxy card in favor of BlackRock's nominees at several funds, including BlackRock Capital Allocation Term Trust (BCAT), BlackRock California Municipal Income Trust (BFZ), and others.
• Glass Lewis believes Saba Capital has failed to make a compelling case for the changes it seeks and that BlackRock's nominees are more qualified.
• Glass Lewis also notes that some funds have delivered exceptional distribution rates without excessive fees and that recent board actions, like distribution rate increases, have narrowed NAV discounts.
• BlackRock has recently announced enhancements across its closed-end fund complex, including discount management programs, distribution increases, and fee waivers, providing $2.9 billion in liquidity.
• Shareholders are urged to vote using the WHITE proxy card and disregard any gold proxy cards from Saba Capital.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the support from Glass Lewis and the rejection of Saba Capital's proposals. However, the ongoing proxy fight introduces some uncertainty.

Positives

• Independent proxy advisory firm Glass Lewis supports BlackRock's board nominees.
• Glass Lewis rejects all of Saba Capital's proposals to terminate BlackRock as investment adviser.
• Glass Lewis believes BlackRock's nominees are more qualified than Saba Capital's nominees.
• BlackRock has implemented enhancements to its closed-end fund complex, providing $2.9 billion in liquidity.
• Glass Lewis notes that some funds have delivered exceptional distribution rates without excessive fees.

Negatives

• The document highlights a contested proxy battle with Saba Capital Management, indicating potential shareholder dissatisfaction.
• Saba Capital is actively seeking to terminate BlackRock as the investment advisor for several funds.

Risks

• The outcome of the shareholder votes on June 17, 18, 25, and 26 is uncertain.
• Saba Capital's continued activism could lead to further disruptions or changes in fund management.
• Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time.

Future Outlook

BlackRock will update performance and certain other data for the funds on a monthly basis on their website in the Closed-end Funds section of www.blackrock.com, as well as certain other material information as necessary from time to time.

Management Comments

• We applaud Glass Lewis for backing our incumbent Board nominees and rejecting every Saba proposal to terminate BlackRock as investment manager.
• These recommendations, along with the strong support we received from ISS, highlight the strength of our Board members, the quality of our portfolio management team and our continued legacy of delivering for all shareholders, said R. Glenn Hubbard, Chair of the Boards of BlackRock Closed-End Funds.

Industry Context

This announcement reflects the ongoing trend of activist investors challenging established asset managers in the closed-end fund space, seeking to unlock value through various strategies such as fund terminations or changes in investment policy.

Comparison to Industry Standards

• The document does not provide specific financial performance metrics to compare against industry standards.
• However, the mention of 'exceptional distribution rates' and 'narrowing of NAV discount' suggests a focus on delivering competitive returns and managing fund valuation relative to peers.
• Without specific benchmarks or competitor data, a detailed comparison is not possible.

Stakeholder Impact

• Shareholders: The outcome of the proxy vote will directly impact the management and direction of the closed-end funds.
• Employees: The stability of BlackRock's investment management role is at stake, potentially affecting job security.
• BlackRock: The firm's reputation and assets under management are being challenged by Saba Capital's activism.

Next Steps

• Shareholders to vote on the WHITE proxy card by the deadlines for each fund's annual meeting.
• BlackRock to continue engaging with shareholders to garner support for its board nominees and investment management.

Key Dates

Keywords

BlackRock, Saba Capital, Proxy Fight, Glass Lewis, Closed-End Funds, Board Nominees, Investment Adviser, Shareholder Vote, BCAT, BFZ, BIGZ, BMEZ, BNY, BSTZ, ECAT, MHN, MPA, MYN