Bramson targets Electra with demand for boardroom seats
Wednesday 30 July 2014
The private-equity group Electra has repelled an attack by the activist investor Ed Bramson, who wants to join the company’s board and launch a review of its strategy.
Mr Bramson, who is best-known for leading a boardroom coup at F&C Asset Management, has built a 19 per cent stake in Electra over the past few months through his Sherborne Investors vehicle but until now has remained tight-lipped about his plans.
However, Electra’s chairman, Roger Yates, yesterday revealed that he and a non-executive director, Geoffrey Cullinan, have met with Mr Bramson, who had requested that he and two other unnamed people join Electra’s board. Mr Bramson said he also wanted to lead a review of Electra’s strategy – as he did at F&C in 2010, before going on to remove key directors and eventually selling the fund manager to Canada’s Bank of Montreal in May.
Electra, which is being advised by Goldman Sachs and JP Morgan, said: “The board of Electra has carefully considered Mr Bramson’s request and has decided to reject it. [The board] actively keeps the company’s strategy under regular review and is of the opinion the current strategy has delivered consistently superior long-term returns for all shareholders and sees no reason to deviate from this successful strategy.”
As well as overhauling F&C, Mr Bramson built a 5 per cent stake in the private-equity giant 3i before banking a 38 per cent profit last year.
At the time, 3i’s chief executive, Simon Borrows, said the corporate raider had been a “complete mystery”. He added: “I found it hard to understand what it was all about because we’d already started our turnaround programme before Sherborne invested. It was a distraction in some ways because we’d get asked about him by our LPs [investors] but it didn’t affect our strategy.”
This time around, Mr Bramson looks likely to have his work cut out, with analysts at Liberum describing Electra’s management team as “one of the highest regarded in the sector”, having delivered a total shareholder return of 268 per cent over the past 10 years.
Max King, at one of Electra’s largest shareholders, Investec Asset Management, said: “We are wholly supportive of the board’s decision to turn down these requests. We do not believe that the directors proposed by Mr Bramson would do more than represent his own interests.
“We see no need for a ‘strategic review’ other than the ongoing strategic review of the business which it is the duty of the board to continue at every board meeting.
“Mr Bramson’s request implies some unspecified change of direction, the need for which is far from apparent. Any change is more likely to be for the worse than the better.”
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