Alliance Trust’s former chairman Lesley Knox has urged the company’s shareholders to vote against a boardroom shake-up being led by the activist hedge fund Elliott Advisors.
Ms Knox, who chaired the Scotland-based investment trust for eight years until 2012, said she did not believe Elliott was acting in the long-term interests of the trust.
“I very much doubt that Elliott’s time horizon is a long one, and do not believe it is aligned with why I am a shareholder in Alliance Trust,” she said in a letter to The Sunday Telegraph. “Its suggestion of a huge buyback at a narrow discount would only benefit those who wish to leave and would be detrimental to those who wish to continue as shareholders.”
New York-based Elliott was founded by the billionaire Paul Singer in 1977. It wants to appoint three City heavyweights to the company’s board, to beef up performance and cut costs.
Alliance claims the three – Anthony Brooke, Peter Chambers and Rory MacNamara – are not independent, and has warned that Elliott will use them to “exert undue influence”.
Ms Knox added: “I am sure Elliott’s proposed candidates are reputable, but to even consider voting them on to the board I would need assurance that each of them is, and will continue to be, wholly independent, with no business relationship with Elliott or any other major shareholder, and will act in the interests of all long-term shareholders and not just those of Elliott.
“I would also like to know that they intend to invest their own money in the trust and, subject to the wishes of the shareholders and board, remain as directors for the maximum period, which is nine years.”
Alliance Trust, which is led by Katherine Garrett-Cox, saw off an attempt by the hedge fund Laxey Partners to overhaul the company’s structure in 2012. However, Elliott controls 12 per cent of its shares, compared with the 1.5 per cent owned by Laxey at the time.
The latest battle will be decided at Alliance’s annual meeting in Dundee on 29 April. About 70 per cent of Alliance’s shareholders are retail investors.Reuse content