Flexible office-space provider Workspace Group Plc (WKP.L) on Thursday urged shareholders to vote in favor of all board-backed resolutions and also reject proposals from activist investor Saba Capital Management ahead of its annual general meeting on July 23.
Earlier this year, Saba, a major shareholder in Workspace, called for a managed wind-down of the company through asset sales and the return of capital to shareholders. Saba argued that the stock was trading at a persistent 45% discount to its net asset value (NAV).
Workspace rejected the proposal in May, calling it unrealistic and value-destructive. Saba, which has since raised its stake to more than 28%, subsequently sought a shareholder vote to replace several non-executive directors with its own nominees.
Workspace said its existing strategy and recently refreshed management team offer a clearer path to long-term value creation, while describing Saba's proposals as "high-risk," "short-sighted" and unsuitable for the company.
The company argued that Saba's disposal plan, first unveiled in January and later revised, would effectively result in an accelerated wind-down requiring a greater volume of property sales at discounts that are unrealistic in the current market.
Workspace noted that more than £200 million of assets are currently being marketed for sale and that interest received so far does not support Saba's estimates regarding the number of potential buyers. Workspace added that recent property sales have been completed at significantly wider discounts to earlier valuations than suggested by Saba.
The board also criticized Saba's proposal to improve certain properties through an external manager, saying the plan lacks sufficient detail and relies on an outsourcing model that is not widely used in the U.K. flexible workspace sector.
Workspace said its board and management team possess extensive operational and real estate experience and are best positioned to execute the company's strategy, which includes disposing of non-core assets and reinvesting in the business to improve long-term returns.
While acknowledging that the company's share price does not fully reflect the value of the business, Workspace said it remains committed to engaging constructively with all shareholders, including Saba.
As of this writing, Workspace shares were trading 1.11% higher at 328.40 pence on the London Stock Exchange.
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