Electra rejects Ed Bramson's restructuring plan
Tuesday 29 July 2014
Private-equity group Electra has rejected an attack by activist investor Ed Bramson, who wants to sit on the company’s board and launch a review of its strategy.
Bramson, 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, today Electra’s chairman, Roger Yates, revealed that he and non-executive director Geoffrey Cullinan met with Bramson last Thursday, who had requested that he and two other unnamed people join Electra’s board.
Bramson said he also wanted to lead a review of Electra’s strategy — as he did at F&C, before removing key directors and eventually selling the business to Canada’s Bank of Montreal in May.
In a statement, the group- which is being advised by Goldman Sachs and JP Morgan- said: “The board of Electra 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, Bramson built a 5 per cent stake in private-equity giant 3i before banking a profit last year. He looks to have his work cut out this time around 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, of Investec Asset Management — one of Electra’s largest shareholders — 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. “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, in our view."
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