SNP leader offers backing to Alliance Trust
Call to protect company after Garrett-Cox approach to First Minister
NICOLA Sturgeon has given her backing to Alliance Trust’s campaign to see off rebel shareholder Elliott Advisors in an unusual political intervention by the First Minister.
The SNP leader is understood to have written a carefully worded letter in response to an approach by chief executive Katherine Garrett-Cox, highlighting the issues of short-term market gain and long-term sustainability. Ms Sturgeon is also believed to have invited the chief executive to remain in contact.
The move comes despite Alliance Trust’s warnings over independence.
NICOLA Sturgeon has thrown her weight behind Alliance Trust’s campaign to see off rebel shareholder Elliott Advisors, following an approach by chief executive Katherine Garrett-Cox to the First Minister.
The SNP leader, in a carefully-worded response to the approach by Ms Garrett-Cox, is understood to have highlighted the issues of shortterm market gain and long-term sustainability, and to have invited the chief executive to remain in contact.
The unusual political intervention, particularly in view of Alliance Trust’s warnings about independence last year, was echoed by the SNP’s deputy leader, Stewart Hosie. He said yesterday that Elliott’s challenge may not be in the interests of all shareholders. He called for Alliance to be “protected over the long term”.
Meanwhile, Alliance Trust’s chairman, Karin Forseke, has rebutted Elliott’s claim that it had not specifically proposed a liquidation of 40 per cent of the 127-year-old trust.
She told The Herald: “They want us to tender at a three to five per cent discount, they have repeatedly told us to do 40 per cent at that discount.”
The trust’s share price is currently at a discount of more than 12 per cent to the asset value of the £3.6 billion fund.
Elliott has denied making such proposals, insisting it is a long-term shareholder, and has published email correspondence purporting to show as much. Ms Forseke said: “It has been done verbally, several times.”
In comments that will further annoy the New York hedge fund which holds 12 per cent of Alliance’s shares, Mr Hosie said: “This is a critical time for the future of Alliance Trust and I note the helpful and supportive comments from business leaders such as Sir Angus Grossart in recent days.”
He said Alliance Trust was one of Dundee’s and Scotland’s greatest successes and it was “very important to me that the city’s bright future, of which Alliance Trust has a key role to play, is protected over the long term”.
Mr Hosie is MP for Dundee East, and the city recorded a 57 per cent Yes vote in last year’s referendum.
Ms Forseke, however, disclosed in the run-up to the vote that Alliance had set up off-the-shelf companies registered south of the Border which might be needed in the event of a yes verdict.
Mr Hosie went on: “Alliance Trust employs around 250 skilled people in Scotland and serves customers across the UK from its Dundee base. The emotional heritage that is invested in the city and Scotland more broadly must be protected. While I recognise the importance of active and healthy investor challenge, I do not believe that Elliott Advisers’ goals are aligned to the long-term interests of the city of Dundee or Scotland more broadly. Therefore I encourage Alliance Trust shareholders to consider their votes very seriously ahead of next week’s AGM.”
Ms Forseke also contested Elliott’s claim last week that it had been made an offer by Alliance Trust to buy up its entire stake 17 months ago.
“That is our brokers,” she said. Any such offer would have been made by brokers, not by the trust, which knew nothing about the terms offered, she insisted. “Whatever we do, we have to treat shareholders equally.
We could never be in a position to give preferential treatment to one shareholder.”
On partial liquidation, Ms Forseke said: “That is what our shareholders do not want us to do. Most are really long-term shareholders, dependent on the dividend and continuous growth in the share price value. It would of course benefit the shareholders who could get out but what about the rest...it would be a very different company.”
On the three directors proposed by Elliott for election at next week’s annual meeting in Dundee, Ms Forseke said poor corporate governance had been one of the main factors in the financial crash. “This is not an issue about the individuals, it is about the process....a couple of factors are fundamental and one is the diversity of the board in skills and backgrounds, as well as the process of due diligence.”
Alliance currently has a sevenstrong board but is searching for another non-executive following the resignation in February after only two years of Win Robbins, who was one of four women on the board including unusually both the chairman and chief executive.