LONDON (Alliance News) - Electra Private Equity PLC hit back at claims from activist investor Edward Bramson and urged shareholders to vote against the resolutions that Bramson's Sherborne has put forward at its upcoming extraordinary general meeting.
Electra said that it promotes 'reasonable questioning' of its portfolio performance, however, said that in the opinion of its board, Sherborne Investors is "an activist investor seeking control by the backdoor".
Sherborne's proposals are for the appointment of Bramson and his long-time associate Ian Brindle to Electra Private Equity's board. Shareholders are due to vote on the proposals November 5.
Electra responded to statements levied against it in a letter from Sherborne last Friday, saying that Bramson had made a series of "ill-judged, ill-informed and ill-founded claims about the company and its board" that it cannot "let stand".
"It is also high time Mr Bramson spelt out his plans for Electra. Despite being invested for 21 months, he has consistently refused to do so. Shareholders and the public markets deserve better than this. Once again, we urge investors not to put our successful formula at risk and to vote against the Sherborne resolutions," Electra's Chairman Roger Yates said in a statement.
In its letter last week, Sherborne said that having two members of Electra's eight-strong board would add "skills and oversight". "It does not begin to approach 'control'," Sherborne said. In addition, Sherborne criticised Electra's performance, pointing to Electra's share price since October 12, 2006. "Electra underperformed the FTSE 250 by 14% from then until January 2014 when Sherborne Investors started buying its 30% shareholding," it said.
In its rebuttal, Electra highlighted an "excellent" short and long-term performance, and said Sherborne is an activist investor with a "short-termist and cost-cutting focus" that is "misaligned" with the company's strategy. Additionally, Electra argued that as Sherborne currently holds a 29.75% stake in the company, the Sherborne nominees would wield "disproportionate power" on the board.
Shares in Electra were down 0.7% at 3,420.00 pence Wednesday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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