DEFA14A: BlackRock Defends Management of Science and Technology Term Trust Against Saba Capital Challenge

BlackRock urges shareholders to vote against Saba Capital's proposal to terminate BlackRock's investment management agreement for the BlackRock Science and Technology Term Trust (BSTZ).

Summary

• BlackRock is actively defending its management of the BlackRock Science and Technology Term Trust (BSTZ) against a challenge from activist hedge fund Saba Capital Management L.P.
• Saba is attempting to oust BlackRock as the investment manager.
• BlackRock highlights actions taken to narrow discounts and enhance distributions across its closed-end funds.
• The document provides data showing improvements in total market price discount to NAV and fund vs index return for several funds including ECAT, BIGZ, BCAT, BMEZ, BFZ, MHN, MYN, BNY and MPA.
• BlackRock urges shareholders to vote 'FOR' BlackRock's board nominees and 'AGAINST' Saba's proposal using the WHITE proxy card.
• Shareholders are instructed to disregard any GOLD proxy cards received from Saba.
• Georgeson LLC is available to answer shareholder questions at 1-866-529-3057.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive as BlackRock is actively defending its position and highlighting performance improvements. However, the challenge from Saba Capital introduces uncertainty.

Positives

• BlackRock has taken shareholder-friendly actions to narrow discounts and enhance distributions.
• The document presents data showing improvements in fund performance and discount reduction.
• BlackRock is actively fighting to maintain its management of the fund.

Negatives

• Saba Capital is attempting to oust BlackRock as the investment manager, creating uncertainty.
• The document acknowledges that 2022 was a challenging year.

Risks

• Saba Capital's attempt to terminate BlackRock's investment management agreement could negatively impact the fund's performance.
• Shareholder votes are critical in determining the future management of the fund.

Future Outlook

The future management of the fund depends on the outcome of the shareholder vote regarding Saba Capital's proposal.

Management Comments

• BlackRock has taken shareholder-friendly actions across its closed-end funds to narrow discounts, enhance distributions and deliver long-term value.
• BlackRock is fighting for YOU.

Industry Context

Activist investors like Saba Capital often target closed-end funds to unlock value by narrowing discounts or changing management. This proxy fight is part of a broader trend of increased activism in the investment management industry.

Comparison to Industry Standards

• The document compares the fund's performance against relevant benchmarks such as the Russell 2500 Growth Index, MSCI Custom ACWI SMID Growth HC Call Overwrite Index, MSCI Custom ACWI SMID Growth IT Call Overwrite Index, Bloomberg Municipal Bond Index, and 50% MSCI ACWI Index + 50% Bloomberg US AGG Bond Index.
• It is common for investment managers to highlight performance improvements relative to these benchmarks to demonstrate their value to shareholders.
• Other closed-end funds managed by firms like Eaton Vance, Nuveen, and Franklin Templeton could be considered peers for comparison, although the specific investment strategies may differ.

Stakeholder Impact

• The outcome of the proxy vote will directly impact shareholders, as it will determine who manages the fund.
• The employees of BlackRock's investment management team are also affected by the potential change in management.

Next Steps

• Shareholders need to vote on the proxy proposals.
• The outcome of the vote will determine the future management of the fund.

Key Dates

Keywords

BlackRock, Saba Capital, BSTZ, proxy, investment management, closed-end fund, shareholder vote, discount, distributions