Alliance Trust has agreed an eleventh hour truce with Elliott Advisers in a sensational development in the battle for control of the Dundee investment trust.
The trust has agreed to appoint two of the three non-executive directors proposed by the US hedge fund. In return, Elliott is withdrawing its three resolutions from the trust’s annual general meeting on Wednesday.
Elliott has also given a commitment to support the trust’s board and management in all other resolutions, and will not agitate against the trust for at least a year.
The development, announced this morning, heads off what was set to be a showdown between the two sides at the AGM in the Gardyne Theatre.
Elliott, the trust’s biggest shareholder with a 12% stake, had been calling for change in the 127 year-old trust.
It wanted the trust to appoint three new non-executive directors Anthony Brooke, Rory Macnamara and Peter Chambers to its board to drive up performance.
The trust had strongly opposed the move.
This morning, the trust announced that, following discussions, Elliott Advisors (UK) Ltd has agreed to withdraw its three resolutions from the AGM.
Elliott has committed to support the board and management on all other resolutions.
The statement continued: “The board and Elliott have also agreed on certain mutual non-disparagement undertakings and that Elliott will not call a general meeting or seek to agitate against the company, its board or management publicly until after the company’s 2016 AGM at the earliest.”
The board has agreed to appoint Anthony Brooke and Rory Macnamara once customary regulatory approvals have been obtained and they will act as board observers in the interim period.
The board has also accelerated the process to appoint an additional independent non-executive director, which will be done in consultation with major shareholders.
Karin Forseke, chair of the trust, said: “On behalf of the whole board, I would like to express my gratitude to our shareholders for engaging with us on this important issue.
“Having considered this feedback we have worked with Elliott to find a compromise which we believe is in the best interests of all our shareholders.”
She welcomed Anthony and Rory to the board and said their significant experience will be a considerable asset.
Elliott said: “We are pleased to have reached an understanding with Alliance Trust and look forward to following the enlarged board’s progress on strategic and business matters over the next year and beyond.
“Elliott acknowledges and appreciates the widespread engagement and support from fellow shareholders of the company and others in recent weeks. We believe that this solution is in the best interests of all shareholders.”
The hedge fund expressed its gratitude to Peter Chambers for engaging with this effort and for gracefully agreeing to stand aside as a candidate to join the board.
“We understand that Alliance Trust will wish to set the criteria for its own search for a further non-executive director, and will accept the company’s open invitation to major shareholders to be consulted in that process,” the statement added.
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