Elliott, which owns 12% of the trust, has publically admonished Alliance Trust’s board and chief executive for the comments made in a shareholder circular produced last week.
In the circular, Alliance Trust said it believes Elliott has plans for ‘disruptive actions’ and its proposal ‘is not just about nominating directors.’
The Alliance Trust directors also said Elliott’s interests are at odds with other shareholders and it believes that Elliott is motivated by a desire to exit their shareholding quickly.
In response Elliott released a scathing statement saying it feels the circular ‘fails to engage on matters of substance and resorts to personal attacks in a manner unbecoming of directors of a public company.’
The firm added that the way the Alliance Trust board is handling the situation strengthened the case for ‘added independence and a fresh perspective.’
Equities analysts at JP Morgan have sent out a research note seemingly offering some validation of Elliott’s position. In the note it says ‘it is hard to deny that performance has been lacklustre on a relative basis to broader equity indices and peers.’
JPM acknowledges that the current management team has taken major steps to tackle this over the years however, and recent performance is encouraging.
Despite this the bank said it is ‘difficult to see shareholders tolerating underperformance from this strategy over the next few years.‘
