Shareholders in the Herald Investment Trust (HRI) are to be given the opportunity to cash out their entire stakes. This follows the trust’s announcement on Friday (9 Jan 2026).
Herald is proposing a tender offer allowing shareholders to sell up to 100% of their shares. This will be at close to NAV (net asset value).
| Herald INvestment Trust (HRI) | Price: £26.51 | Market cap: £1.27bn |
The move comes as the company faces pressure from Saba Capital Management. Saba owns approximately 30.7% of Herald’s shares and has previously attempted to take control of the board.
Discount challenges
Saba is believed to be frustrated at the discount the share price trades to NAV. This is a widespread issue across the investment trusts space. The valuation gap currently stands at 12.1%, based on the £24.60 closing price yesterday. That’s 19% wider than its 9.8% average over the past year. Although it is roughly in line with the 3- and 5-years averages.
‘The board is taking decisive action today. Shareholders have a full and fair choice to continue with the current manager and mandate. Alternatively, they can receive cash at close to net asset value,’ said Andrew Joy, chairman of Herald Investment Trust.
Manager Katie Potts is widely respected in the investment community as a smaller company tech stock picker.
Conditions attached
The tender offer is conditional upon Saba tendering all or most of its shareholding. If Saba blocks the offer, which it can do with its over 25% stake, the board will launch a ‘backstop tender offer.’ This will require only a simple majority approval.
Herald has delivered a NAV total return of 2,956% since inception and 31% over the last three years. The company’s performance has significantly outpaced Saba Capital Master Fund. Saba returned 151% since its April 2009 inception compared to Herald’s 907% over the same period.
The board members have confirmed they do not intend to tender their shares in the initial offer. However, they would do so in the backstop offer if the first is blocked.
A circular with full details is expected to be published soon. The tender offer is likely to remain open until mid-February 2026. The required general meeting is expected in early February.
The board emphasised that shareholders remaining invested will not bear any costs of the tender offer if it proceeds. All expenses will be deducted from the tender pool.
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