An independent advisory agency has voted against activist investor Milkwood’s bid to prevent the wind-down of Downing Strategic Micro-Cap trust (DSM).
Milkwood, which purchased a 28% stake in the company following the announcement of the investment company’s wind-down in November last year, voted against returning cash to shareholders via a B-share scheme back in April, which required a 75% shareholder approval – thereby blocking it. Aside from Milkwood’s vote, DSM stated that less than 0.28% of the votes cast by shareholders voted against the managed wind-up.
In July, Milkwood founder Rhys Summerton called a requisitioned general meeting for 5 August this year, whereby shareholders would vote on whether to remove current chair Hugh Aldous as well as incumbent board member Robert Legget, instead replacing them with Summerton and two of his colleagues at the value-focused investment boutique.
In July this year, DSM’s board called the blockade of the trust’s wind-down “wholly self-interested and disruptive… when the board and the investment manager are focused on returning cash to shareholders”.
Ahead of next month’s RGM, which will take place at 10am in Old Broad Street, London, Milkwood’s proposals were assessed by an independent proxy advisory agency. The adviser voted against each of Milkwood’s requisitioned solutions, which also included thwarting the trust’s second and third interim dividend payouts, which would have meant shareholders receive approximately 90% of the trust’s NAV.
Shareholders will be able to vote on the activist investor’s proposed plans up until 6pm on the 1 August.
DSM’s chair Aldous said in a stock announcement today (25 July): “It is clear that the leading governance advisers, who are trusted by major fund managers around the world, are in agreement that the proposals would put the company under the leadership of directors who are not independent and will not necessarily represent the interests of all shareholders.
“I am pleased that they agree with the board in rejecting these self-interested proposals.”
