Saba's high-stakes campaign against Workspace has escalated, with the activist investor urging an immediate break-up of the flexible office provider's extensive property portfolio. The New York-based hedge fund, led by Boaz Weinstein, claims that Workspace's revamped strategy is riddled with "considerable execution risk" and will fail to deliver significant returns for several years.
Saba, which holds a 24.7% stake in Workspace and is the company's second-largest shareholder, is advocating for an "orderly and accelerated disposal programme" of its offices. The hedge fund believes this approach would unlock immediate value for investors and should be coupled with a share buyback programme to address the persistently low share price. According to Paul Kazarian, a partner at Saba, shareholder value could be realised more swiftly and with substantially lower risk by prioritising significant property sales, with proceeds directed towards share buybacks rather than large-scale reinvestment.
Workspace's shares have plummeted by around 60% since 2021, consistently trading at a substantial discount to its net asset value (NAV). This underperformance is attributed to a broader downturn in the property trust sector and a shift towards more permanent office arrangements. Saba acquired a stake in Workspace last year following this bleak performance.
Workspace's new executive team has unveiled a revised strategy aimed at transforming the company into an "earnings-focused business," which involves reinvesting proceeds from any property disposals back into the existing portfolio – a move that directly contradicts Saba's proposals. However, Saba has outlined a three-phase disposal roadmap involving 56 assets, arguing this framework offers a clear path to value realisation while maintaining market flexibility.
The ongoing dispute highlights a broader trend within the UK's investment trust industry, where Saba has been actively seeking to instigate changes. The hedge fund has previously called for the removal of all six of Workspace’s non-executive directors, including chairman Duncan Owen, to facilitate its break-up plans. A vote on Saba’s proposed board changes is anticipated at Workspace's Annual General Meeting in July, setting the stage for a potential showdown.