Alliance Trust has urged shareholders to back the board in its battle against US hedge fund Elliott Advisors, in a letter asking investors who they trust most to run one of the UK’s oldest investment companies.
On Thursday, an influential shareholder advisory body, ISS, backed Elliott, the company’s largest single shareholder, in its push to have three directors appointed to the board at the annual meeting on 29 April. ISS said the three put forward by Elliott – Anthony Brooke, Peter Chambers, and Rory Macnamara – would benefit the business.
But Alliance Trust, one of the UK’s oldest investment companies, is urging shareholders, including 60,000 retail investors, to reject the new directors and to place their trust in the current board.
In a letter to investors on Friday morning, Alliance Trust’s chair, Karin Forseke, wrote: “Who do you trust to run your company? My fellow directors and I are acutely aware of our responsibility for the stewardship of the company’s heritage and its role in creating and protecting our investors’ wealth for over 126 years. It is this that underpins our vision.”
She talked of a “critical moment for the future of the company that you own”.
Forseke continued: “We have previously described Elliott and their affiliates as a business that seeks to influence companies to change their strategic direction through public and disruptive campaigns. As a hedge fund manager they do this to create value for their own investors and we believe they have very different perspectives from other shareholders of Alliance Trust.
“The board has concluded that the Elliott Resolutions are not in the best interests of shareholders as a whole, and unanimously recommends that you should vote against the Elliott Resolutions.”
She branded Elliott “aggressive” and potentially “destructive” in an interview with the Telegraph, and said Elliott had repeatedly told her it wanted to force the board to buy back up to 40% of its shares and scrap the dividend.
