Elliott Advisors gain support ahead of vote on Alliance Trust board
US hedge fund Elliott Advisors has gained further support for its controversial attempt to get three new non-executives appointed to the board of Alliance Trust.
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Both Legal & General Investment Management and Aberdeen Asset Management, which hold 2.5% and 1.5% of the trust respectively, has indicated that they will vote in favour of Elliott at Wednesday's vote.
The news will be of concern to chief executive Katherine Garrett-Cox, who has previously said she refuses to be "bullied" by the hedge fund and described its plans as being at the "thin end of the wedge".
Elliott, which has built a 12% holding in the 127-year-old investment manager, has split investors with its proposals and criticism that Alliance currently demonstrates a "lack of openess".
Last week saw Garrett-Cox receive the support of third-largest shareholder, publishers DC Thomson, which said it was "satisfied" the group has continued to address its concerns about issues such as governance, capital growth, dividend and underlying costs.
However, voting advisers ISS and Pirc have shown support for Elliott, according to the Sunday Times. The newspaper also quoted Stephen Paters at Charles Stanley as saying that while Garrett-Cox has "made the trust a lot better", "investment funds are such a competitive world and Alliance Trust is a bit of a relic ... It's only when you start doing a comparison that you see how badly it has done". He refused to confirm which side he would be recommending.
Elliott needs 50% of the votes if it is to succeed in electing the three directors.