ISS Recommends ClearBridge Energy Midstream Opportunity Fund Shareholders Vote FOR Saba Capital’s Nominee on the GOLD Proxy Card
April 10 2023 - 5:05PM
Business Wire
ISS, a Leading Independent Proxy Advisory Firm,
Supports the Election of Saba Capital’s Nominee Paul Kazarian to
ClearBridge’s Board
Cites ClearBridge’s Underperformance and
“Corporate Governance Abuses”
Concludes the Board Intended to “Disenfranchise
Common Shareholders”
Saba Capital is Committed to Boardroom Change
and Closing ClearBridge's NAV Discount
In February, Franklin Resources, ClearBridge’s
Parent Company, Lost in US District Court in Another Entrenchment
Battle with Saba Capital Over the Templeton Global Income Fund
Saba Capital Management, L.P. (“Saba” or “we”), the largest
common shareholder of the ClearBridge Energy Midstream Opportunity
Fund Inc. (NYSE: EMO) (“EMO” or “ClearBridge” or the “Fund”), today
announced that a leading proxy advisory firm, Institutional
Shareholder Services Inc. (“ISS”), has recommended shareholders
vote for the election of Saba’s director candidate Paul Kazarian to
the Fund’s Board of Directors (the “Board”) at the 2023 Annual
Meeting of Shareholders (the “Annual Meeting”) scheduled to be held
on April 14, 2023.
In its full report, ISS affirmed Saba’s case for boardroom
change and agreed with Saba’s concerns regarding ClearBridge's
unilateral private placement, which impairs the voting rights of
common shareholders:1
- “…EMO unilaterally transferred voting power from common to
preferred shareholders without adequate justification, which is
a gross infringement of the common shareholder
franchise…”
- “This unilateral transfer of voting power from common to
preferred shareholders is unacceptable.”
- "The events relating to the private placement of preferred
shares are replete with corporate governance abuses.”
ISS also noted serious concerns regarding ClearBridge’s
corporate governance abuses and the Fund’s historical
underperformance:
- “…EMO has deficiencies with corporate governance that
evidence an intent to disenfranchise common
shareholders.”
- “Historically, EMO traded at a wider discount to NAV than
peers, and TSR was disappointing in both absolute and
relative terms.”
Finally, ISS confirmed Saba made a compelling case for change at
ClearBridge:
- “Therefore, support for Paul Kazarian, who is a direct
representative of the fund's largest common shareholder, is
warranted.”
Paul Kazarian, Partner and Portfolio Manager of Saba,
commented:
“We are pleased that ISS has recognized the need for change in
ClearBridge’s boardroom and shares our concerns regarding the
Fund’s historical underperformance, corporate governance abuses and
gross attempts to disenfranchise shareholders. ClearBridge’s
dilutive private placement of preferred shares reaffirms our view
that this Board will do everything in its power to avoid
accountability for the mismanagement and underperformance of the
Fund.
It is troublesome that in 2022 Clearbridge appointed Eileen
Kamerick as its Lead Independent Trustee. Ms. Kamerick is an
‘independent’ who served as a director on this board for a decade,
during which time she oversaw the Fund's glaring corporate
governance failures. Saba finds it hypocritical that Ms. Kamerick,
the co-founder of The Governance Partners, LLC, a firm specializing
in ‘ISS rating compliance’ and ‘board governance policy,’ could be
overseeing such blatant governance failures. Despite calling
herself a ‘recognized expert on corporate governance' and teaching
corporate governance at a leading university,2 Ms. Kamerick
apparently does not feel strongly enough about the principles of
good governance to warrant resigning from a board replete with
governance failures.
We strongly believe that the best path to closing the Fund’s
steep discount to NAV and unlocking value for shareholders is
through immediate boardroom change. Saba will continue to defend
the rights of common shareholders to ensure a fair election at the
upcoming Annual Meeting.”
About Saba Capital
Saba Capital Management, L.P. is a global alternative asset
management firm that seeks to deliver superior risk-adjusted
returns for a diverse group of clients. Founded in 2009 by Boaz
Weinstein, Saba is a pioneer of credit relative value strategies
and capital structure arbitrage. Saba is headquartered in New York
City. Learn more at www.sabacapital.com.
Important Information
Saba Capital Management, L.P. (“Saba Capital”), Saba Capital
Master Fund, Ltd. (“Saba I”), Boaz R. Weinstein (“Mr. Weinstein,”
and together with Saba Capital and Saba I, “Saba”) and Paul
Kazarian (“Mr. Kazarian” or the “Nominee,” and together with Saba,
the “Participants”) have filed with the Securities and Exchange
Commission (the “SEC”) a definitive proxy statement and
accompanying form of GOLD proxy to be used in conjunction with the
solicitation of proxies from the shareholders of ClearBridge Energy
Midstream Opportunity Fund Inc., (the “Fund”). All shareholders of
the Fund are advised to read the definitive proxy statement and
other documents related to the solicitation of proxies by the
Participants, furnished to some or all of the Fund's shareholders
and is, along with other relevant documents, available at no charge
on the SEC website and http://www.sec.gov/. Information about the
Participants and a description of their direct or indirect
interests by security holdings is contained in the definitive proxy
statement filed by the Participants with the SEC on February 28,
2023. This document is available free of charge on the SEC
website.
1 Permission to quote ISS was neither sought nor obtained. 2
Source: https://law.uiowa.edu/people/eileen-kamerick.
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Longacre Square Partners Greg Marose / Kate Sylvester,
646-386-0091 gmarose@longacresquare.com /
ksylvester@longacresquare.com
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