Shareholder group tells Alliance Trust voters to back board or face ‘major problems’

The Alliance annual meeting will be held on February 28 and will see shareholders asked to vote on a radical new investment approach at the 129 year-old venerable trust.

The move aims to end a period of instability at the firm after US-based Elliot waged a vigorous campaign for change to improve its performance.

Shareholder support is being sought for the proposal to buy the entirety of Elliot’s near 20 per cent shareholding, which was agreed between the two parties in January.

Proposed corporate governance changes also include a shift to a multi-manager approach and the sale of Alliance Trust Investments (ATI) to Liontrust Asset Management.

SahreSoc said: “The Alliance Trust Shareholder Action Group which has been supported by ShareSoc is satisfied that the new Board of Directors has made good progress in revitalising the Trust since it was appointed. The steps taken have substantially closed the share price discount to net asset value (a long standing concern of many investors), the disposal of the non-core Alliance Trust Investments (ATI) subsidiary has been agreed and steps taken to make Alliance Trust Savings (ATS) both profitable and able to stand on its own feet.

“The board structure and corporate governance of the company have been changed and are now in a more conventional form for investment trusts.

“The repurchase of the Elliot shares will avoid future pressure from them and the purchase appears to be at a fair price and does not favour them over other investors who can currently sell shares in the market at a similar price and will continue to be able to do so.

“For those reasons we support the recommendation of the Directors to vote in favour of the resolutions.

“We encourage all shareholders to ensure that they vote on these important resolutions.”

ShareSoc warned: “If the resolutions at the General Meeting were defeated then it would put the company back at square one and potentially create major problems. Investors need to consider the proposals bearing in mind the history of the company and the other options available. In other words, a holistic consideration of the proposals needs to be taken rather than taking issue with minor technical points.”