Continuation votes are often only a formality for trusts, with most receiving the nod to carry on for another five years.
However, for Hipgnosis Songs Fund Limited (LSE:SONG) this couldn't be further from the case.
The investment trust confirmed the exit of two directors, Andrew Wilkinson and Paul Burger, late on Wednesday afternoon, under pressure from some major investors in the run-up to a big shareholder vote on Thursday.
Chair Andrew Sutch remains in place, despite calls for his departure, meaning tomorrow could still provide some surprises.
One major investor, Metage Capital, penned an open letter to other investors last week to urge them to vote against the reinstatement of Wilkinson, Burger and Sutch.
The public letter, seen by Proactive, is the second this month from major shareholders and follows a dividend cut and an announcement by the board that a strategic review has been launched.
Metage said it has "run out of patience with the ongoing turmoil at the company", citing a "series of self-inflicted wounds" in recent years including an inadvertent breach of leverage limits, the dissolution of subsidiaries while holding rights, and the current proposed £440 million asset sale to Blackstone, for which a shareholder vote is due to take place next Thursday, alongside a continuation vote and an annual general meeting.
Mo Money Mo Problems
The first letter was from 5% shareholder Asset Value Investors (AVI) after the trust announced the withdrawal of its proposed interim dividend.
With an open letter demanding "a reset is urgently required", AVI said "not one" of many major shareholders it has spoken to is in favour of an immediate sale of the portfolio.
Having read the letter, broker Stifel said it "broadly agrees" with the contents of the letter, "as yesterday's news on the dividend withdrawal has changed the dynamic around the upcoming votes".
In the letter, AVI said it had contacted "a majority" of the share register and said it now believes that "many" will vote against continuation at the AGM and EGM on Thursday, 26 October.
"We urge undecided shareholders not to be swayed by a misleading narrative that a failure to pass the continuation resolution results in a wind up of the company or a fire sale of assets," the letter said.
"We are concerned that a dangerous misleading narrative has been allowed to develop as to what happens if the Continuation Resolution is not approved by shareholders."
Stifel analysts said: "We think any incoming chairman would now recognise a vote against continuation and the first disposal as being a protest vote against the incumbents and the cleanest method to ensure shareholders regain control over the company and not an order to commence an immediate orderly sale of the portfolio."
Bye Bye Bye
If the continuation vote is passed, shareholders will also vote to decide whether to go ahead with the US$440 million disposal of music rights to Blackstone, having shopped around for other bidders with no luck.
In all, 17 groups were contacted as part of the 'Go-Shop' process, with eight eventually signing non-disclosure agreements.
There were no binding offers, the company said, adding: "The board received feedback through the process that a number of the parties assessed that they could not justify paying a higher price than the offer from the buyer for the first disposal."