Activist investor Elliott Advisors has hit back at Alliance Trust claiming its statement this morning was “factually inaccurate”.
Elliott Advisors said that Alliance Trust’s statement was “erroneous and misleading” because it made “speculative assertions” about Elliot’s plans to reduce the trus’ts discount and other intentions.
They noted the “proposed directors will, if elected, form their own view as to what is in the best interests of shareholders in a manner wholly independent of Elliott.”
Elliott added it was “surprised and disappointed” Alliance Trust did not think it would benefit from the experience of three independent board members.
The investor said it was “puzzled as to how the board could have reached their conclusion without meeting or speaking with the candidates.”
The statement comes amid a heated week between one of the UK’s largest investment trusts and Elliott, which has roughly a 12 per cent holding.
The board of Alliance Trust has unanimously recommended that shareholders in the investment company vote against resolutions put forward by the US-based activist hedge fund manager at the annual general meeting next month.
In a statement to the stock exchange Alliance Trust said this morning that criticisms put forward by Elliott Advisors in their notice earlier this month were “misguided” and that “we are fully aware of a company’s need to address its shareholders’ concerns, and we absolutely refute the suggestion that we have not provided meaningful responses to Elliott on the matters it has raised”.
The hedge fund said they wanted to appoint three new directors to the board. Alliance Trust have argued that the proposed directors “cannot be judged to be independent” and is “concerned that Elliott may seek to exert undue influence” as it seeks to pursue a short-term agenda aimed at selling its holding in the company.
Karin Forseke, chair of Alliance Trust added: “Elliott’s proposed resolutions are completely unacceptable. The Board believes that they are a pre-cursor for further disruptive actions from Elliott which are likely to focus solely on engineering an exit from their shareholding and would not be in the interests of all of our shareholders.
However, investment trust broker Numis Securities said that Alliance Trust’s response was “entirely predictable” and they believe that Elliott “has raised a number of valid points” and “it has been sensible in proposing new additions to the Board”.
