Dundee-based Alliance Trust has warned shareholders that plans by US hedge fund Elliott Advisors are at odds with the best interests of one of Britain’s oldest investment companies.
In a circular in response to Elliott’s resolutions, the AT board states its belief that Elliott’s actions with proposals that are not just about nominating directors would be disruptive.
The board believes the hedge fund is looking to exit its shareholding quickly as part of a risky plan to achieve better performance.
The AT board considers Elliott’s proposed directors are not independent, and that the company’s strategy which consistently delivers strong shareholder returns should not be jeopardised.
AT chairman Karin Forseke said shareholders should consider carefully the board’s circular and vote against Elliott’s resolutions.
“This is about more than the nomination of directors, and Elliott has plans for disruptive actions that are at odds with the interests of other shareholders,” she said.
The directors proposed by Elliott cannot be considered independent, she stated, and their addition would “allow Elliott to pursue its own agenda and engineer a quick exit from its shareholding”.
AT has a rich history with bright prospects, and she added: “We are asking our investors to stand behind us, as they have before, to protect their company so we can continue to deploy our differentiated strategy and deliver strong returns for all shareholders for generations to come.”
Elliott have publicly questioned the Trust’s recent investment performance and requisitioned a vote at next month’s annual general meeting in a bid to have the three new non-executive directors appointed.