Alliance Trust says it has struck a deal to buy its shares back from Elliott, the activist shareholder that has needled it for several years, once to the point where Alliance said it “threatened its very existence”.
The investment trust, which launched a strategic overhaul late last year, plans to buy nearly 20 per cent of its shares back from Elliott in five tranches shortly after its next annual general meeting.
It says:
The Board believes that the proposed repurchase is in the best interests of the Company and its shareholders as a whole… the ability for the Company to move forward with its multi-manager proposal… and the fact that the targeted annual costs of the ongoing Company will remain competitive.
Elliott says:
When Elliott became a shareholder over five years ago Alliance Trust had poor corporate governance and its shares traded at more than a 15% discount to net asset value. Since then, corporate governance has improved, an external asset manager has been proposed and the discount has narrowed to less than 5%. Elliott welcomes the opportunity to participate in the offer being made to all other shareholders under the buyback programme.
In April 2015, Elliott led a shareholder revolt over the high pay of the company’s then-chief executive, Katherine Garrett-Cox, which had doubled in five years, to £1.4m. Alliance agreed to appoint two of three independent directors nominated by Elliott, before ousting Ms Garrett-Cox last year. In December, Alliance embarked on a structural rejig, following a strategic review prompted by Elliott earlier that year.
A not-so-misty-eyed look back on their relationship:
April 2015: The bruiser from New York takes on an unlikely opponent in eastern Scotland.
April 2015: Alliance Trust-Elliot row intensifies. Alliance rejects accusations it is misstating its cost base, not paying enough dividends.
March 2015: Alliance hits back at “disruptive” Elliott that “threatens its very existence”.