Alliance buckles under Elliott strain
ALLIANCE Trust has buckled under pressure from a US investor pushing for change at the firm, hours before a showdown it faced losing.
In an attempt to save itself from the prospect of a humiliating defeat at today’s annual meeting, the under-performing trust has bowed to demands made by activist group Elliott Advisors.
Elliott had demanded Alliance appoint three directors to the board in a move that was likely to hasten the departure of under-fire boss Yesterday Alliance agreed to accept two of the board directors, Anthony Brooke, a former director of SG Warburg, and Rory Macnamara, a former director of Morgan Grenfell. The trust and the hedge fund also agreed a truce that prevents Elliott causing further disruption for a year. This effectively gives Garrett-Cox a 12-month lifeline in which to turn around the company and alleviate concerns about loss-making divisions.
One senior shareholder in Alliance said the development was a ‘victory for Elliott as they have got most of what they want’.
Elliott, which had built up a 12pc stake in the 127-year-old trust, began calling publicly for change last month.
The American group’s proposals gained momentum after they were backed by large institutional investors including Legal & General and Aberdeen Asset Management.
Alliance Trust’s shares rose 1p to 520p.