DEFA14A: BlackRock Science and Technology Term Trust Urges Shareholders to Vote Against Saba's Proposal

BlackRock Science and Technology Term Trust (BSTZ) is urging shareholders to vote using the WHITE proxy card against Saba Capital's proposal to terminate BlackRock as the investment manager, highlighting BSTZ's strong performance and concerns about Saba's motives and expertise.

Summary

• BlackRock Science and Technology Term Trust (BSTZ) has adjourned its annual meeting to July 16 to allow shareholders more time to vote.
• BlackRock is urging shareholders to vote FOR the Board's nominees and AGAINST Saba Capital's proposal to terminate BlackRock as the investment manager.
• BlackRock highlights BSTZ's total shareholder returns of 29.4% since 2023, outperforming its benchmark.
• The fund has improved its discount by 8.8%, generating $118 million in value for shareholders.
• A discount management program provides shareholders with an additional 9.8% of annual liquidity at NAV.
• BlackRock argues that Saba's aim is a quick profit at the expense of the Fund and shareholders.
• They also claim Saba's nominees are underqualified and lack closed-end fund expertise.
• Leading independent proxy advisors, like Glass Lewis, recommend voting FOR ALL Board nominees and AGAINST terminating BlackRock as investment manager.
• Shareholders are instructed to use the WHITE proxy card and disregard any gold proxy cards from Saba.
• Online voting closes at 11:59 PM ET on July 15, 2024.

Sentiment

Score: 7

Explanation: The document presents a generally positive view of BlackRock's management of the fund, highlighting strong performance and discount improvement. However, the conflict with Saba Capital introduces uncertainty and potential risks, slightly lowering the overall sentiment.

Positives

• BSTZ has delivered strong total shareholder returns of 29.4% since 2023.
• The fund has significantly improved its discount, generating $118 million in value for shareholders.
• The discount management program provides shareholders with additional liquidity.
• Leading proxy advisors support BlackRock's board nominees and oppose Saba's proposal.

Negatives

• Saba Capital is attempting to terminate BlackRock as the investment manager.
• BlackRock claims Saba's nominees are underqualified and have zero closed-end fund expertise.
• BlackRock alleges Saba's true aim is a quick profit at the expense of the Fund and shareholders.

Risks

• The potential termination of BlackRock as the investment manager could disrupt the fund's strategy.
• Saba's proposed riskier strategies may not align with the investment goals of current shareholders.
• Increased fees and expenses could result from Saba's management.

Future Outlook

The fund intends to offer to repurchase 2.5% of its outstanding common shares at a price equal to 98% of NAV following the end of each quarter (6/30/24, 9/30/24, 12/31/24 and 3/31/25) if the fund's common shares trade at a discount of more than 7.5% during each of those quarters.

Management Comments

• BlackRock and your Board continue to deliver for you.
• Saba's true aim is a quick profit for themselves at the expense of your Fund and shareholders like you.
• Saba's nominees are underqualified, have zero closed-end fund expertise and are beholden to Saba's interests, not yours.

Industry Context

This announcement reflects the ongoing trend of activist investors challenging the management of closed-end funds to unlock value. Saba Capital is known for its activism in the closed-end fund space, often targeting funds trading at a discount to NAV.

Comparison to Industry Standards

• The document mentions that BSTZ's total shareholder return outperformed the MSCI custom ACWI SMID Growth IT Call Overwrite Index (ex-BSTZ).
• It would be useful to compare BSTZ's performance against other similar closed-end funds focused on science and technology to assess its relative performance.
• For example, comparing BSTZ to funds like the AllianzGI Artificial Intelligence & Technology Opportunities Fund (AIO) or the Columbia Seligman Premium Technology Growth Fund (STK) could provide valuable insights.

Stakeholder Impact

• Shareholders are directly impacted by the outcome of the proxy vote, which will determine the fund's investment manager.
• Employees of BlackRock could be affected if Saba's proposal to terminate BlackRock as investment manager is successful.

Next Steps

• Shareholders need to vote on the Board nominees and the proposal to terminate BlackRock as investment manager by July 15, 2024.
• The annual meeting will take place on July 16.

Key Dates

Keywords

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