Elliott knocks back Alliance buyout claims

The latest twist in the long-running spat saw the US hedge fund reveal that it rejected a bid from Alliance Trust to buy out its entire 12.5 per cent stake 17 months ago, a claim that directly contradict allegations made by Alliance’s chief executive Katherine Garrett-Cox in the Financial Times that “from the first time I met them and at every meeting since, Elliot has made it clear they are looking for an opportunity for an exit”.

The short-term intentions of Elliott has formed the core of the current regime’s campaign to have shareholders reject the activist’s machinations at next Wednesday’s AGM.

But the hedge fund’s spokesman claimed that Alliance Trust’s brokers had written to Elliott in November 2013 to bid for its entire shareholding. “We rejected the bid, and have increased our shareholding since.”, an Elliot statement said.

In her interview with the FT Ms Garrett-Cox called Elliott’s claim it was a long-term shareholder “nonsense”.

She said Elliott had “also made it clear that dividends, which are an artery for a huge swath of our investor base, are a waste of time, which is incredibly short term”.

In its latest rebuttal, the hedge fund said: “Elliott is a long-term shareholder in the company, and has been the largest buyer of shares in the market since 2010.

“We have met directors of the company on over 20 occasions, including attending all the annual general meetings in person, since we first became shareholders.”

It added that it had “never specifically proposed to the company that it should amend its dividend policy”.

It would like to see a more attractive dividend yield “as long as such a policy is sustainable and not at the expense of long-term capital preservation and growth”.

Corporate governance groups ISS and Pirc last week recommended that investors vote in favour of the Elliott’s proposed shake-up.

Meanwhile, veteran merchant banker Sir Angus Grossart has joined Unilever boss Paul Polman and BAE Systems chairman Sir Roger Carr in throwing his weight behind Alliance Trust.

Mr Grossart, who chairs Edinburgh-based merchant bank Noble Grossart and the Scottish Futures Trust, a public body aimed at making infrastructure investment more efficient, said: “This is an invitation to dine from an unpriced menu at a restaurant you should avoid, regardless of how well-dressed the chefs are.”

It was also reported at the weekend that Dundee-based publishing group DC Thomson, which owns 5.5 per cent of the trust, plans to vote against the move.