Workspace hits back at Saba's 'high-risk' plan ahead of key vote

(Sharecast News) - Workspace Group hit out at Saba Capital Management on Thursday, as it urged shareholders to reject "flawed" plans by the activist investor to break up the business. The New York hedge fund, which has taken a 28% stake in the British real estate investment trust, is seeking shareholder approval to replace all six non-executive directors. It also wants the business to be wound down, arguing that the firm's shares are trading below the value of its properties.

In response, Workspace has brought in a new chief executive - former The Office Group head Charlie Green - and launched a turnaround strategy that includes selling £200m of non-core buildings by the end of the year.

Saba criticised the strategy earlier this week and called on fellow shareholders to instead back its proposals at this month's annual general meeting.

But on Thursday the flexible office group hit back. It acknowledged that the share price "doesn't reflect the value of the business". But it said it had a "clear, disciplined strategy to deliver long-term sustainable value for all shareholders" and argued that Saba's "flawed" plan for a managed wind-down within 12 months was "high-risk, short-sighted and not suitable for Workspace".

It continued: "The board's clear view is that this strategy reflected limited understanding of UK real estate market conditions and of the operational complexity of Workspace."

The landlord also called Saba's proposed outsourcing model "unclear".

It concluded: "The board unanimously urges shareholders to vote for all Workspace-proposed resolutions and to vote against all Saba resolutions."

Workspace will update on first-quarter trading on 15 July, with the AGM due to take place on 23 July.

As at 1100 BST, shares in the FTSE 250 firm were broadly flat at 325p.

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