24th Sep 2014 11:28
LONDON (Alliance News) - The board of Electra Private Equity PLC has been given a boost by two prominent shareholder advisory groups as it looks to fend off activist investor Edward Bramson, who wants to lead a strategic review of the private equity investment trust and make changes to its board.
Both Institutional Shareholder Services Inc (ISS) and Pensions & Investment Research Consultants Ltd (PIRC) have recommended that Electra shareholders vote against the activist investor's proposals.
Sherborne Investors, through which Bramson has amassed a 20% stake in Electra, has claimed the value of shareholdings in the private equity trust could be increased by more than GBP1.0 billion with lower risks and less volatility than under the trust's current strategy. Sherborne has also accused Electra of underperformance.
The activist wants fellow shareholders to back the appointment of Bramson, as well as former Sherborne Investors (Guernsey) B Ltd Non-Executive Chairman Ian Brindle, to Electra's board. It has also called for the removal of Geoffrey Cullinan from the board.
Electra has since reiterated that it wants other shareholders to vote against the proposals, accusing Sherborne of making "unverifiable statements" and "unsubstantiated claims" ahead of a general meeting scheduled for October 6.
"After evaluating the dissident and incumbent arguments with respect to the company's financial and shareholder return performance, strategic track record and governance profile, we conclude the dissidents have not met their burden of proving that some change on the board is warranted," ISS said in its report.
PIRC said it doesn't have significant concerns over the composition of Electra's board, which Sherborne has criticised for its "limited" commercial experience. "The level of independence of the board would be reduced from the appointment of two shareholder representatives affiliated with a significant shareholder," PIRC said.
"The need for a strategic review has also not been sufficiently justified and the company?s performance does not merit major concern," PIRC added.
Electra shares were Wednesday quoted up 0.8% at 2,676.88 pence.
By Samuel Agini; [email protected]; @samuelagini
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