The flexible office group Workspace has warned shareholders of a “clear risk of value destruction” if they back activist investor Saba Capital Management’s plans to force a sell-off of its properties and replace all six non-executive directors. The call to arms comes ahead of the company’s annual general meeting on July 23, with investor votes due by July 21.
New York-based Saba, run by chief investment officer Boaz Weinstein, recently upped its stake in Workspace to 28%, making it the second largest shareholder. In January, the hedge fund called for the company to be wound down, arguing its shares trade below the value of its properties. In May, it escalated its campaign by demanding the removal of all non-executive directors.
“Workspace warns shareholders against Saba Capital's plans to force a property sell-off and replace directors, citing risk of value destruction.”
Workspace’s shares have slumped to their lowest level in more than a decade after the company warned that profits would be hit by falling rents and occupancy rates, rising debt and energy costs, and wider economic uncertainty. It said it was bracing for a “substantial step down” in earnings for the year to March 2027.
Despite the market pressure, Workspace’s board urged shareholders to reject Saba’s proposals, describing them as “high-risk, short-sighted and not suitable”. In a statement, the board said: “The board sees a clear risk of value destruction in the execution of a stealth ‘managed wind-down’ plan by Saba nominees with limited operational public listed real estate investment trust experience.”
Saba, meanwhile, struck back earlier this week, saying Workspace had “failed its investors” and that it had “little confidence” in the company’s turnaround strategy given its “long record of value destruction”.
In response, Workspace acknowledged the share price problem but insisted it had a better plan. “We recognise the current share price doesn’t reflect the value of our business – accordingly, the board has proactively taken steps to develop an enhanced strategy and will continue to keep an open dialogue with our shareholders,” the company said. It added that the board had “a clear, disciplined strategy to deliver long-term sustainable value for all shareholders” and that shareholders deserved the opportunity to see that plan through, a plan it believes “is lower risk and will deliver superior value compared to Saba’s proposals”.