Coxed in

21 April 2015 By Neil Unmack Follow @unmack1

The Scottish investment trust’s fight with Elliott Advisors has turned ugly. Embattled CEO Katherine Garrett-Cox has criticised the U.S. activist but barely parried its criticisms. Copying some of Elliott’s ideas – and tweaking her pay – would be a smarter defence.

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Alliance Trust shareholders will vote on April 29 whether to appoint three new independent directors, as proposed by Elliott Advisors. The group, which owns 12 percent of Alliance stock and is the investment trust’s largest shareholder, proposed Rory Macnamara, Peter Chambers and Anthony Brooke as independent directors to the board on March 16, citing concerns over performance and governance.

Elliott criticised the underperformance of Alliance Trust’s investment portfolio against its sector peers and relevant benchmarks, as well as its high and inflexible cost base.

“As a result, the company has among the highest discounts to intrinsic value among its relevant peers. We believe that the board’s failure to address these concerns, and fulfil the company’s full potential, is indicative of a system of corporate governance which requires new impetus.”

Alliance Trust said in a circular on March 26 that Elliott has plans for disruptive actions, and that the three proposed directors are not independent.

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