Dundee investment giant Alliance Trust has brought in headhunters to find a new non-executive director to fend off a challenge from rebel shareholders.
The company is accelerating its search for an independent non-executive board member, having originally said it would make the move in the summer.
Speeding up the quest is seen as a tactic to repel the bid by US hedge fund Elliott Advisors to have three new non-executive directors appointed to the trust’s board.
Elliott believe the influx is needed to improve the trust’s medium term performance but AT’s board hopes to defeat what it believes is a high-risk strategy that threatens the trust’s future.
The AT board is calling for continued shareholder support in their effort to repel the Elliott move at the annual general meeting in Dundee on April 29.
In a trading update on Tuesday, the investment trust confirmed it had hired headhunters Russell Reynolds to “undertake a broad, transparent and rigorous search”.
AT had recently declared its intention to initiate a search for a new truly independent non-executive director in the summer as part of ordinary board forward planning.
The appointment of Russell Reynolds has accelerated the process, and the firm said: “This search will be based on an assessment of the needs and challenges of the business and the skills and experience required to complement those of existing board members.
“As part of this process any candidates put forward by our shareholders will be considered.”
The AT board thinks that plans by Elliott, which owns 12% of the trust, are at odds with the best interests of one of Britain’s oldest investment companies.
It believes Elliott’s actions would be disruptive as the hedge fund is looking to exit its shareholding quickly as part of a risky plan to achieve better performance.
The AT board also considers Elliott’s proposed directors are not independent, and that the company’s strategy which delivers strong shareholder returns should not be jeopardised.
AT reported a strong first quarter, with its total shareholder returns up by 6.9% and its net asset values rising by 7.9%, both in the top or second quartile of the global sector peer group over one year.
The share price continues to reach new all-time highs exceeding 500p for the first time last month and an all-time high of 523p.
The trust says the year will be an exciting period for its subsidiaries and the board is confident they will deliver long-term value for shareholders.
Alliance Trust Investments ended the quarter with more than £2 billion of third party assets under management.
Alliance Trust Savings increased account numbers and assets under administration reached £7bn in March.
Chief executive Katherine Garrett-Cox said: “We are pleased with the strong performance of Alliance Trust during the period which we believe shows that our strategy is working.
“The trust has outperformed the global sector over the first three months of the year, a continuation of the work Peter Michaelis and Simon Clements have done since they were appointed in September of last year.”