Alliance Trust makes renewed pitch to shareholders

Alliance Trust written a letter to shareholders on Friday as its battle against US hedge fund Elliott intensified.

Elliott, which is a New York-based activist hedge fund, wants to install three new directors on to Alliance's board because it says the group is underperforming while at the same failing to control costs.

The Scottish group appealed to its shareholders, 70 per cent of which are retail investors, to trust its current leadership and reject the move by Elliott.

Karin Forseke, chairman of Alliance, said in the letter: "We have previously described Elliott and their affiliates as a business that seeks to influence companies to change their strategic direction through public and disruptive campaigns. As a hedge fund manager they do this to create value for their own investors and we believe they have very different perspectives from other shareholders of Alliance Trust.

"The board has concluded that the Elliott resolutions are not in the best interests of shareholders as a whole, and unanimously recommends that you should vote against the Elliott resolutions."

Alliance Trust said it would publish the letter on its website campaigning against Elliott.

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"It is this that underpins our vision 'to be the UK's most trusted investment and savings business'. We believe that the strategy we have set out for our company will help us to achieve this vision, by delivering strong and sustainable investment performance for our shareholders over the longer term."

The three candidates Elliott wants to install on the board are: Peter Chambers; the former chief executive of Legal & General Investment Management, Anthony Brooke, a former executive of SG Warburg, and Rory Macnamara, a former director of Morgan Grenfell.

They are experienced City grandees with strong track records. The vote on their installation will be held at the group's annual meeting in Dundee on April 29.

Earlier this week, an influential shareholder adviser recommended that investors vote in favour of the US hedge fund's proposal.

Institutional Shareholder Services, which advises investors in about 20 per cent of UK stock market, said: "The addition of three candidates like Peter Chambers, with extensive management experience, Rory Macnamara, with extensive board and investment banking experience, and Anthony Brooke, with asset management and investment banking experience, would be beneficial for the company."

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