11th Sep 2014 12:44
LONDON (Alliance News) - Electra Private Equity PLC Thursday said it sees no need for the strategic review or board changes called for by shareholder Sherborne Investors, and advised shareholders to vote against all of the proposals the activist shareholder has made.
The news comes after Sherborne, which has built up a 19% stake in Electra, last month called for a general meeting at which shareholders are due to vote on proposals that could result in the appointment to the Electra board of Edward Bramson, a partner and the portfolio manager of Sherborne Investors Management LP.
The activist is also calling for the appointment of former Sherborne Investors (Guernsey) B Ltd Non-Executive Chairman Ian Brindle. The proposals envisage the removal of Electra board director Geoffrey Cullinan, but Electra Thursday gave its backing to the director.
Electra Thursday said that Sherborne has provided "no detail" as to where the activist sees "substantial opportunities" to improve shareholder value. No argument has been set out explaining the need for, or benefits of, a strategic review, Electra added.
"The board of Electra strongly believes that it is in the best interests of its shareholders to vote against all the general meeting resolutions. Electra is a successful firm, with an investment strategy that has delivered superior long-term returns and is kept under active review," Electra Chairman Roger Yates said in a statement.
"We also believe that it is very important to maintain a board which is wholly non-executive and independent of any significant shareholder. The resolutions proposed by Sherborne have the potential to be highly destabilising to Electra. Shareholders should protect their investment and the long-term value of Electra by voting against all resolutions," Yates added.
Sherborne's actions risk permanently damaging long-term shareholder value, Yates warned.
"The average holding period of Sherborne's disclosed UK investments suggests an approach which is incompatible with the long-term nature of Electra's private equity investments," Yates wrote in a letter to shareholders.
"Moreover the destabilising effect of a strategic review led or instigated by Mr. Bramson and Mr. Brindle on the manager and Electra's investments runs the risk of damaging shareholder value," he added.
Electra is managed by Partners LLP.
Electra has scheduled the general meeting scheduled for 1100BST on October 6 in London.
Electra shares were Thursday quoted up 0.1% at 2,701.54 pence per share.
By Samuel Agini; [email protected]; @samuelagini
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