LONDON (Alliance News) - Activist investor Edward Bramson on Friday had harsh words for Electra Private Equity PLC just shy of three weeks ahead of a crucial vote, at which shareholders will decide whether to appoint the activist and one of his allies to the private equity trust's board.
Electra, which is managed by Electra Partners, has been defending itself against Bramson's efforts, urging shareholders to vote against his proposals. Sherborne wants to appoint Bramson and his long-time associate Ian Brindle to Electra Private Equity's board, and thinks the trust's opposition to those nominees is unwarranted.
The activist 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," the activist said.
Sherborne holds a 29.75% equity stake in the private equity investment trust, as well as a convertible bond representing an additional 1.17%, and has been a shareholder for almost two years.
"The hostile reactions of the investment manager and the board seem disproportionate to a proposal by a long-term shareholder to nominate a small minority of qualified directors to Electra's board," Bramson said in a statement.
The activist said that Electra's corporate governance is "deficient" because of the influence of the investment manager, which according to Sherborne "effectively controls" board nominations and "opposes" additional board oversight.
"Electra is a public company and the benefits of public capital come with additional duties and levels of oversight which are currently lacking," Bramson said.
Responding later on Friday, Electra Private Equity Chairman Roger Yates said that the trust has for 20 months "sought an open dialogue" with Bramson.
"Today, Sherborne has still made no case for changing Electra's successful, proven model. He has instead chosen to make baseless criticisms about the way the company is run. Sherborne is an activist investor with a short-termist track record focused on cost-cutting: today's letter does nothing to change that. The board, which plans to issue a full rebuttal of Sherborne's letter in due course, stands by Electra's excellent track record. Once again, I would call on shareholders to safeguard the long-term future of the company by voting against Sherborne's resolutions," Yates said in a statement.
Shareholders are due to vote on November 5.
Shares in Electra Private Equity were down 0.6% at 3,415.00 pence on Friday afternoon.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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