22nd Sep 2014 08:50
LONDON (Alliance News) - Electra Private Equity PLC Monday struck back in the war of words with Sherborne Investors, as the private equity investment trust accused the activist shareholder of making "unverifiable statements" and "unsubstantiated claims" ahead of a general meeting next month.
Electra Private Equity's response comes after Sherborne, which has built up a 20% stake in the investment trust, last week claimed the trust's value could be increased by more than GBP1.0 billion with "lower risks and less volatility" than under its current strategy. The activist shareholder also criticised the trust's performance against the FTSE 250 index of small- and medium-sized listed companies, its strategy, allegedly high investment expenses, and its utilisation of borrowing.
In its response, Electra said Sherborne provided "no further detail" as to how it would create the additional value referred to in its letter.
"We are surprised that Sherborne's letter demonstrates considerable misunderstanding of how Electra works. Exuberant and unsubstantiated claims are no substitute for Electra's consistently superior track record. The board of directors of Electra would again like to reassure shareholders of its unrelenting focus on delivering superior returns for all shareholders," Electra Chairman Roger Yates said in a statement.
"Against any sensible industry benchmark, Electra has delivered exceptional performance over the long-term. Your board aims to continue this record without the destabilising efforts of Mr. Bramson. The board of directors of Electra strongly urges all shareholders to vote against the resolutions," Yates added.
Edward Bramson, a partner and the portfolio manager of Sherborne Investors Management LP, wants to appoint himself and former Sherborne Investors (Guernsey) B Ltd Non-Executive Chairman Ian Brindle to Electra's board. Bramson has said he would then lead a strategic review.
Electra maintains that Sherborne's proposed strategic review would have a "deeply destabilising effect on Electra, the manager and the portfolio companies and risks destroying significant shareholder value in the future."
Electra shares were Monday quoted up 1.1% at 2,690.42 pence per share.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
ELTA.LSIGB.L