In a letter sent out yesterday Saracen's chairman, Anthony Dick, told shareholders that the preferred choice of future managers for the fund had been cut from 15 to just two - Invesco and JO Hambro. The chairman also said that Saracen continued to reject the HSBC proposals.
Invesco's proposals are thought to offer Saracen shareholders a choice of cash or shares in an existing Invesco fund, or a mixture of the two, subject to a minimum take-up of the share alternative.
The Hambro plan will offer shareholders a partial return of cash, an ongoing programme of share buy-ins and warrant repurchases designed to support the price of the remaining shares and a restructuring of the Saracen share portfolio to improve longer term performance of the fund. The fund would be managed by Malcolm King and Caroline Harris, who formerly managed the successful Finsbury Smaller Companies Trust. Hambro also proposes to reduce the annual management fee.
Saracen's independent directors have promised shareholders further details of the preferred proposals within 10 days, so that shareholders will have time to consider them before the meeting called to consider the HSBC proposals on 18 September.
It is possible that Saracen's board will seek to add a resolution favouring one or other of the two proposals to the agenda for the meeting, but if there is not enough time to do so shareholders are being asked to reject the HSBC plan and wait for a second meeting to consider the alternatives.
Much may depend on the freedom of choice for shareholders. HSBC claims that just over 50 per cent of shareholders have already given support for the HSBC plans, including 37.5 per cent who have given irrevocable undertakings.