DEFA14A: BlackRock Urges Shareholders to Reject Saba Capital's Board Nominees and Investment Management Termination Proposal

BlackRock is urging shareholders to vote against Saba Capital's proposals to install its own nominees and terminate BlackRock's investment management agreement for certain closed-end funds.

Summary

• BlackRock is actively campaigning against Saba Capital Management's attempt to install its own board nominees and potentially terminate BlackRock's investment management of the BlackRock Science and Technology Term Trust (BSTZ) and BlackRock New York Municipal Income Trust (BNY).
• BlackRock asserts that Saba's proposals are not in the best interest of shareholders and aim for short-term profit at the expense of long-term investment goals.
• The company highlights its strong performance and improved discounts in recent years, refuting Saba's claims of underperformance.
• BlackRock emphasizes the experience and qualifications of its board nominees and portfolio managers.
• Independent proxy advisory firms like Institutional Shareholder Services Inc. (ISS) and Glass Lewis have recommended that shareholders vote in favor of BlackRock's nominees.

Sentiment

Score: 6

Explanation: The document conveys a defensive stance against an activist investor, highlighting positive performance while acknowledging the risk of potential disruption. The sentiment is neutral to slightly positive, focusing on defending the company's position.

Positives

• Independent proxy advisory firms ISS and Glass Lewis support BlackRock's nominees.
• BlackRock highlights its strong performance and improved discounts in recent years.
• BlackRock's portfolio managers are described as industry thought leaders with decades of experience.
• BlackRock is actively communicating with shareholders to address concerns and provide information.

Negatives

• Activist hedge fund Saba Capital Management is attempting to install its own nominees and potentially terminate BlackRock's investment management of BSTZ.
• Saba claims that BlackRock's CEFs are not performing as intended, which BlackRock disputes.
• The proxy battle creates uncertainty and potential disruption for the funds.

Risks

• If Saba's proposals are successful, BlackRock could lose its investment management agreement for BSTZ.
• The proxy battle could distract management and create uncertainty for investors.
• Saba's actions could lead to changes in the funds' investment strategies or management, potentially impacting performance.

Future Outlook

BlackRock aims to continue delivering strong performance and improving discounts for its closed-end funds, while defending against activist campaigns that it believes are not in the best interests of shareholders.

Management Comments

• BlackRock is asking all shareholders to make their voices heard.
• If Saba prevails, your investments may be at risk.
• BlackRock wants shareholders to hear the truth from them about Saba.
• BlackRock claims Saba is seeking to benefit itself by making a quick profit at shareholders' expense.

Industry Context

Activist investors targeting closed-end funds is a recurring theme in the asset management industry, as these funds can sometimes trade at discounts to their net asset value, creating opportunities for activists to push for changes that could unlock value.

Comparison to Industry Standards

• The involvement of ISS and Glass Lewis is standard practice in proxy contests, and their recommendations often influence shareholder voting.
• BlackRock's defense against Saba's proposals is similar to other instances where asset managers have resisted activist campaigns.
• Comparing the performance of BlackRock's CEFs to similar funds managed by competitors like Nuveen, Eaton Vance, or Franklin Templeton would provide a benchmark for assessing BlackRock's claims of outperformance.

Stakeholder Impact

• Shareholders are directly impacted by the outcome of the proxy vote, as it will determine the composition of the board and the management of the funds.
• BlackRock employees could be affected if the company loses its investment management agreement for BSTZ.
• The outcome could influence the funds' investment strategies and performance, impacting shareholders' returns.

Next Steps

• Shareholders are urged to vote on the proxy proposals.
• BlackRock will continue to engage with shareholders to address concerns and provide information.

Keywords

BlackRock, Saba Capital, proxy fight, closed-end funds, board nominees, investment management, BSTZ, BNY, shareholders, proxy vote