Hedge Fund Accuses Alliance Trust of ‘Unbecoming’ BehaviorSarah Jones
Elliott Advisors accused Alliance Trust Plc and its chief executive officer, Katherine Garrett-Cox, of “unbecoming” behavior in the hedge fund’s latest sally at the 127-year-old U.K. money manager.
Elliott renewed its call to install three new independent directors on the board after shareholder Tim Ingram, a former Alliance Trust director, backed its proposal. Elliott also accused the firm, which issued a circular to shareholders last week, of “distorting” its cost base and underperforming peers.
The “circular fails to engage on matters of substance and resorts to personal attacks in a manner unbecoming of directors of a public company,” Elliott said in a statement on Tuesday. “Comments by a former director about the lack of open debate in the boardroom has strengthened our view that added independence and a fresh perspective is needed.”
Alliance Trust has urged shareholders to rebuff Elliott’s resolution to name Anthony Brooke, Peter Chambers and Rory Macnamara to the board, saying the appointments aren’t independent and they may seek to exert “undue influence.” Garrett-Cox said the hedge fund is only looking to exit its 12 percent stake in the Scottish firm “at any cost.”
Elliott, part of New York-based Elliott Management, founded by billionaire Paul Singer, reiterated Tuesday that it is a “long-term” shareholder and that the board’s failure to challenge the status quo fell short of corporate governance standards.
Elliott’s latest attack follows Ingram’s open letter on Sunday urging shareholders to vote in favor of Elliott’s proposals if they wanted to see “better returns.” Ingram was a non-executive director from September 2010 to April 2012.
ShareSoc, a U.K. private investor lobby group with about 3,000 individual members, has also backed Elliott’s proposal, saying Alliance’s rejection was “typical response” when faced with outside criticism.
Shareholders will vote on the proposal at Alliance Trust’s annual general meeting on April 29. The Dundee, Scotland-based firm oversees about 6.4 billion pounds ($9.4 billion) of assets.