Investor backs Electra proposals

THE GENERAL Electric pension fund, which holds 3 per cent of venture capital group Electra, said yesterday it is backing the management against the pounds 1.25bn hostile bid from rival 3i.

It is the first investor to come out publicly ahead of today's vote on Electra's pounds 544m reconstruction proposals that will decide the trust's fate.

General Electric Investment manages the pensions contributions of employees with the American engineering giant, but is separate from GE Capital, which has been touted as a white bidder for Electra.

Jim Mara, a senior vice-president of GE Investment, said yesterday: "Electra has a management team we have known for 15 years. At this point, our position is that we are backing the known versus the unknown management teams."

In addition to the direct stake in Electra Investment Trust, GE also has a number of direct investments in Electra-sponsored buyouts, which it is concerned could be upset by a change in ownership.

The big battalions, including Legal & General and Prudential, have so far refused to show their hands, although they are widely believed to have shifted in favour of 3i after the sharp rise in 3i's share price last week.

Electra's proposals to buy back 40 per cent of its capital from shareholders at 786p and wind up the trust within five years need the support of 75 per cent of shareholders.