DEFC14A: Saba Capital Urges Pioneer Municipal High Income Fund Shareholders to Oppose Victory Capital Advisory Agreement

Saba Capital is soliciting proxies to vote against the proposed new investment advisory agreement with Victory Capital Management Inc., advocating for shareholders to have the option to exit the fund at net asset value (NAV).

Summary

• Saba Capital is seeking shareholder support to vote against the proposed new investment advisory agreement between Pioneer Municipal High Income Fund, Inc. and Victory Capital Management Inc.
• Amundi, the parent company of the Fund's current advisor, has agreed to combine with Victory Capital, necessitating shareholder approval of the new advisory agreement.
• Saba opposes the agreement, arguing that shareholders should have the opportunity to exit the Fund at NAV, which the Fund currently does not offer.
• The Special Meeting of shareholders is scheduled for March 26, 2025, to vote on the proposal.
• Saba beneficially owns 4,131,903 shares of common stock out of 22,771,349 outstanding as of the record date, February 4, 2025.
• Approval of the new agreement requires the affirmative vote of a majority of the outstanding voting securities of the Fund.
• Saba is urging shareholders to sign and return the GOLD proxy card to vote AGAINST the proposal.

Sentiment

Score: 7

Explanation: The document is assertive and focused on advocating for shareholder rights, which is generally viewed positively by investors seeking to maximize value. However, the need for a proxy fight indicates underlying issues with the fund's management.

Positives

• Saba is advocating for shareholder rights, specifically the option to exit the fund at NAV.
• Shareholders have the right to change their vote by using the GOLD proxy card.
• Saba is providing assistance to shareholders with questions or voting issues through InvestorCom.

Negatives

• The Fund currently does not provide shareholders with the option to exit at NAV.
• Shareholders must actively vote against the proposal to support Saba's position.
• Approval of the New Investment Advisory Agreement requires the affirmative vote of a majority of the outstanding voting securities of the Fund, which is defined under the 40 Act to be the lesser of (a) more than 50% of the outstanding Shares of the Fund, or (b) 67% or more of the Shares of the Fund present (in person or by proxy) at the Special Meeting if more than 50% of the outstanding Shares of the Fund are present at the meeting in person or by proxy.

Risks

• If a majority of shareholders vote in favor of the new advisory agreement, Saba's efforts will be unsuccessful.
• There is a risk that shareholders may not understand the implications of the vote and may inadvertently support the new agreement.
• The Fund's management may actively solicit proxies in favor of the agreement, potentially influencing the outcome.

Future Outlook

Saba intends to solicit proxies from shareholders to vote against the New Investment Advisory Agreement at the Special Meeting.

Management Comments

• Saba opposes the New Investment Advisory Agreement because Saba believes shareholders of the Fund should be given the opportunity to exit the Fund at NAV.
• Saba urges all shareholders who want the option to exit the Fund at NAV to express this desire by voting to oppose the New Investment Advisory Agreement.

Industry Context

This proxy fight reflects a broader trend of activist investors seeking to influence corporate governance and shareholder value in closed-end funds.

Comparison to Industry Standards

• Activist investors like Saba Capital often target closed-end funds trading at a discount to NAV, advocating for measures to close the gap, such as tender offers or liquidation.
• Other examples of activist campaigns in closed-end funds include efforts by Bulldog Investors and Karpus Management.
• These campaigns often focus on improving corporate governance, reducing management fees, or enhancing shareholder liquidity.

Stakeholder Impact

• Shareholders: The outcome of the vote will directly impact their ability to potentially exit the fund at NAV.
• Fund Management: The vote will determine whether Victory Capital will become the new investment advisor.
• Amundi: The vote is a step in the process of combining Amundi Holdings US, Inc. with Victory Capital.

Next Steps

• Shareholders need to sign, date, and return the GOLD proxy card to vote AGAINST the proposal.
• Saba will continue to solicit proxies from shareholders.
• The Special Meeting will be held on March 26, 2025, to vote on the proposal.

Key Dates

Keywords

proxy solicitation, Saba Capital, Pioneer Municipal High Income Fund, Victory Capital, investment advisory agreement, net asset value, shareholder rights, closed-end fund