Bramson tries to force the issue at Electra

The activist shareholder is now requesting the removal of Geoffrey Cullinan from the board

Electra Private Equity has received a formal request from hedge fund Sherborne Investors for a general shareholder meeting to discuss the removal of Geoffrey Cullinan as a director, the London-listed trust said this morning.

Additionally, activist shareholder Bramson, who has amassed a 19 percent stake in Electra via Sherborne, wants himself and Ian Brindle to be appointed to the board. No further resolutions or specific proposals were provided.

Electra Private Equity, whose investment manager is Electra Partners, declined to comment further.

Cullinan was appointed a director in 2011 and is also chairman of Electra’s management engagement committee. Between 1997 and 2005, he was a director of Bain & Company. He was the founder and leader of their private equity business in Europe and continues to be an adviser to the firm. Prior to that, Cullinan was chief executives of Hamleys and a senior non-executive director of Datamonitor.

The formal request comes a few weeks after Bramson met with Electra’s chairman Roger Yates and Cullinan. In the meeting, he also asked to be appointed to the board of Electra, along with two other directors of his choosing, and asked to lead a strategic review of the business.

At the time, Electra said it “carefully considered” the request, but had “decided to reject it”. Electra’s board has a long-standing policy of having independent non-executive directors. “Neither Mr. Bramson, nor Mr. Brindle, who has a longstanding working relationship with Mr. Bramson, would be independent,” Electra said.

While the board “has always listened, and will continue to listen, to the views of shareholders consistent with enhancing long-term shareholder value… the board is of the opinion that the current strategy has delivered superior long-term returns for all shareholders and sees no reason to deviate from this successful strategy”, the trust added.

The formal meeting “may perhaps finally result in Edward Bramson articulating what his investment thesis towards Electra is”, analysts at Dexion pointed out today.

“Once again Mr Bramson does not say what problems he has identified at the company and what improvements he would like to make,” analysts at Oriel said. “Given Electra’s good long-term track record, robust balance sheet management during the 2008 downturn and significant gains on realisations in recent years, we think that most institutional shareholders are likely to resist Sherborne’s attempts to gain two board seats, especially as they have not disclosed their future intentions towards the company.”

“Although we have a hold recommendation on the shares, we cannot clearly see at present what material additional shareholder value could be added post a strategic review of the company, and await communication from Sherborne on the matter,” analysts at Liberum Capital said. “The walls of the Electra Private Equity castle are strong, (justifiably so in our view) and scaling the ramparts will be a significant challenge [for] Sherborne's army, unless a trojan horse of opportunity can be presented.”

Over the 10-year period to 31 March 2014, Electra has delivered a total return of 268 percent, more than double the total return of the FTSE All-Share, which delivered 129 percent over the same period. The Company’s diluted NAV per share total return for the period is equivalent to a ten-year annualised return on equity of 14 percent, at the upper end of Electra’s target range of 10-15 percent.

At 10.30 BST, Electra shares were up 15p to 2,685p, a 0.45 percent rise, giving the trust a market capitalisation of £950.76 million (€1.18 billion, $1.57 billion).