The US activist hedge fund has built up a stake of around 28% in Workspace and is agitating for it to be wound down, arguing that the firm’s shares are trading below the value of its properties. It also wants all six of the company’s non-executive directors to be replaced.
In response, Workspace - which posted a £120m loss in the year to March, hit by falling valuations and lower rents - said last week that it will sell £200m of non-core buildings by the end of the year, with further disposals not ruled out. It urged shareholders to vote against Saba’s proposals at the annual general meeting on 23 July.
The FTSE 250 firm has also brought in a new chief executive, Charlie Green, co-founder and former head of The Office Group.
However, Saba reaffirmed its approach in an open letter to shareholders on Tuesday, insisting that "few would dispute" that Workspace has failed its investors.
"Over the past five years, the company had delivered a total shareholder return, including dividends of -48%, materially underperforming comparable UK Reits. Its shares continue to trade at the widest discount to net asset value in the sector," it said. It said it "recognises" that work that had gone into Workspace’s turnaround plan.
But it continued: "However, it asks shareholders to support a risky, long-term reinvestment programme that management believes can generate returns eight times higher than the company has historically delivered.
"Given the company’s long record of value destruction, together with our own detailed analysis, we have little confidence that this strategy can be delivered successfully."
Founded by Boaz Weinstein, Saba has built up stakes in British investment trusts that are trading at steep discounts to their net asset value.
As at 1430 BST, shares in Workspace were up 1% at 330.8p.