Aberdeen UK Smaller Companies Growth Trust secures Saba agreement until 2029

Aberdeen UK Smaller Companies Growth Trust has entered into an agreement that limits Saba Capital Management's ability to challenge the trust's board or influence its management.

The agreement involves the trust, Saba and abrdn Fund Managers Ltd, known as aFML. It is described as a three-year arrangement and could remain effective until the conclusion of the trust's 2029 annual general meeting.

For shareholders, the immediate benefit is greater governance stability. However, Saba remains free to trade the shares, other than through short selling, and can support or accept a takeover offer.

What has Aberdeen UK Smaller Companies Growth Trust announced?

The board announced the agreement on 3 August 2026, following an earlier announcement from Aberdeen Group on 7 May 2026.

Under its terms, Saba has made several undertakings that restrict how it can engage with Aberdeen UK Smaller Companies Growth Trust.

Key term	Detail
Parties	Aberdeen UK Smaller Companies Growth Trust, aFML and Saba
Stated length	Three years
Latest scheduled end point	Conclusion of the 2029 AGM
Earlier termination trigger	aFML ceasing to be the trust's alternative investment fund manager
Payment by the trust	None
Saba short selling permitted?	No
Ordinary share dealing permitted?	Yes
Support for a takeover permitted?	Yes

An alternative investment fund manager, or AIFM, is the regulated entity responsible for overseeing areas such as portfolio and risk management arrangements for an investment trust.

The agreement ends at the earlier of two points: the conclusion of the company's 2029 AGM, or the date on which aFML stops serving as its AIFM. That qualification matters because the restrictions are linked directly to aFML's continued appointment.

What has Saba agreed not to do?

Saba has accepted a broad set of restrictions covering shareholder resolutions, board composition and influence over the trust's affairs.

During the agreement period, Saba will not:

• Put proposals to shareholders or requisition a resolution or general meeting
• Seek to change the composition of the board
• Seek to control or influence the board, the company, or its policies and management
• Vote against the board's recommendation on a resolution at a general meeting
• Engage directly or indirectly in short selling of the company's shares

Short selling involves seeking to profit from a fall in a share price. The prohibition therefore removes one possible route through which Saba could take a negative financial position against the trust's shares.

The voting commitment is also significant. Saba has not merely agreed to avoid calling meetings or proposing resolutions. It has agreed not to vote against the board's recommendations on resolutions put before shareholders while the arrangement remains effective.

What is Saba still allowed to do?

The agreement has clear limits and should not be mistaken for a complete lock-up of Saba's position.

Saba can continue dealing in the trust's shares, provided that it does not engage in short selling. The announcement does not disclose the size of Saba's existing shareholding, if any, or whether it intends to buy or sell shares.

Saba is also free to vote in favour of, or accept, any takeover offer for the company. This preserves its ability to support a potential transaction even if that transaction leads to a change of control.

No takeover approach or proposed transaction was disclosed in the announcement. The clause simply confirms that the agreement would not prevent Saba from backing one.

Why the agreement matters for shareholders

The clearest positive is that the board now has a defined period in which Saba cannot attempt to replace directors, requisition a meeting or seek influence over company policy and management.

That should reduce the immediate risk of a disruptive public governance dispute involving Saba. It may also give the board and manager more room to focus on running the trust without facing proposals or resolutions from that shareholder.

The company has not paid Saba or its affiliates for these undertakings. The board also stated that the benefits received do not restrict its independence or the company's independence in any way.

Instead, Saba's offer resulted from separate arrangements with Aberdeen, to which the trust is not a party. Aberdeen provided monetary consideration under those separate arrangements, but the amount and terms were not disclosed.

Readers tracking similar developments can also see our coverage of the Aberdeen Group and Saba standstill agreement involving Herald Investment Trust.

The positive and negative readings

Potential positives

• The risk of Saba seeking board changes or calling a shareholder meeting is reduced for the agreement period.
• Saba cannot vote against board recommendations at general meetings.
• Saba cannot directly or indirectly short-sell the trust's shares.
• The trust paid no monetary consideration for the agreement.
• The board says its independence remains unrestricted.

Points to watch

• The protections are temporary rather than permanent.
• They can end before the 2029 AGM if aFML ceases to be the AIFM.
• Saba can still buy or sell the trust's shares.
• Saba remains free to support or accept a takeover offer.
• The size of Saba's shareholding was not disclosed.
• The consideration paid by Aberdeen under its separate arrangements was not disclosed.

The announcement also contains no update on investment performance, net asset value, dividends, the share price or the discount to net asset value. Investors therefore cannot use this RNS alone to assess whether the trust's underlying financial or portfolio position has changed.

A quieter governance period, with important carve-outs

This agreement gives Aberdeen UK Smaller Companies Growth Trust meaningful protection from several forms of shareholder intervention by Saba. The restrictions covering board changes, resolutions, voting and short selling are broad, while the trust itself has paid nothing to secure them.

Still, the arrangement does not remove every strategic possibility. Saba can continue trading the shares and can support a takeover. The protections could also end early if aFML's appointment finishes.

For shareholders, the practical result is a potentially quieter period through to the 2029 AGM, but not a guarantee that the ownership position or future of the trust will remain unchanged.

The full terms disclosed by the company can be read in the original company announcement.