Electra Private Equity has called a general meeting and asked its shareholders to reject calls from activist shareholder Edward Bramson for a strategic review of Electra and the removal of Geoffrey Cullinan as a director, the London-listed trust said in a statement on Thursday.
Electra, which has planned the general meeting on 6 October 2014, said its board of directors does not support Sherborne Investors’ proposals, saying the resolutions “lack both an explanation and any rationale” and “risk permanently damaging long-term shareholder value”. “The board of directors unanimously recommends that all shareholders vote against all the general meeting resolutions,” the firm added.
The news comes after Bramson formally requested a general meeting in August. He also asked to be appointed to the board, alongside Ian Brindle. During a meeting with Electra’s chairman Roger Yates and Cullinan previously, he asked two other directors of his choosing to be appointed to the board, as well as himself, and requested to lead a strategic review of the business, which Electra rejected.
“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,” Electra's Chairman, Roger Yates, said in the statement.
Electra also re-emphasised that the trust has consistently delivered successful investment results. Over the 10-year period to 31 March 2014, it 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.
Electra Private Equity, whose investment manager is Electra Partners, led by chief investment partner Alex Fortescue, has made nine investments so far this year, taking the firm’s total new investment since 30 September 2013 to more than £300 million.
At 15.15 BST, Electra shares were up 7p to 2,707p, a 0.26 percent rise, giving the trust a market capitalisation of £958.55 million (€1.2 billion, $1.55 billion).