Electra Private Equity’s shareholders have rejected all three proposals put forward by activist shareholder Edward Bramson’s hedge fund Sherborne Investors.
At an extraordinary general meeting held Monday at London’s historic Saddlers’ Hall, more than 60 percent of shareholders voted to reject Bramson’s proposal to join the London-listed trust’s board, to install former Sherborne chairman Ian Brindle on the board alongside him, and to oust director Geoffrey Cullinan.
Bramson declined to speak at the event and also comment on the outcome of the subsequent vote.
In a statement issued shortly after the meeting, Electra said it will be launching a review, led by company chairman Roger Yates, covering its fee arrangement, as well as the company's capital structure and distribution policy, having recognised that “these are topics of particular focus for all shareholders and that a review of them is appropriate at the present time.”
An hour later Sherborne released a statement noting the intention of Electra's board to launch a review.
“Sherborne Investors looks forward to hearing more from the Board of Electra about the resultant actions from this review,” the statement said.
In August Sherborne, which has a 20 percent shareholding in Electra, requested a general meeting, calling for a shake-up of the trust’s board and requesting to lead a strategic review of the business, all of which Electra rejected.
In a statement at the time, Yates stressed the importance of maintaining a wholly non-executive board independent of any significant shareholder.
In September Sherborne sent an open letter to Electra’s shareholders claiming that “with certain changes in approach, the aggregated value of shareholdings in Electra could be increased by more than £1 billion with lower risks and less volatility than under the current strategy”.
Electra dismissed Sherborne’s claims as “unverifiable and unsubstantiated”, based on public information covering less than 30 percent of the trust’s investment portfolio, and insisted that over the last 10 years it had consistently outperformed the FTSE 250 Index.
As part of a brief question and answer session with shareholders at the meeting, Yates estimated that the cost of the tussle with Bramson would likely cost between £2 million and £3 million.
Electra shares dipped 2.31 percent on the news to 2,540.00 pence per share, giving the trust a market capitalisation of £901.9 million.