Under-siege Alliance boss gets welcome relief with backing of major shareholder and business leaders

As the beleaguered board of Alliance Trust heads into the final straight leading up to next week’s AGM, fresh support has been offered from both shareholders and prominent observers.

Last week, US hedge fund Elliott Investors, which is campaigning to have three new board members installed at the Dundee-based wealth manager, gained the support of investor voting advisers PIRC and ISS.

Both PIRC and ISS refuted the current Board’s claims that the trio of proposed directors could not be considered independent of their US backers.

However, support from a pair of City heavyweights and a major local shareholder has bolstered the current regime headed by chief executive Katherine Garrett-Cox.

Yesterday Paul Polman, boss of consumer goods giant Unilever, warned shareholder to be wary of the intentions of a short-sighted activist.

Rallying behind Alliance and Ms Garrett-Cox, he said: “Many companies like Alliance Trust have investment propositions that are built around long-term thinking and long-term returns.

“They have the right to defend themselves in the face of those with short-term time horizons and it’s important that shareholders take the time to listen to the arguments in order to make an informed voting decision.”

Also weighing into the debate, Sir Roger Carr, chairman of defence contractor BAE Systems, added: “I have known Katherine Garrett-Cox for many years and have worked alongside her in the Prime Minister’s Business Advisory Group. She has consistently shown huge dedication to her role as a leader in the financial sector and has made a material contribution to good governance and thought leadership in the wider business community.”

It was also reported over the weekend that DC Thomson, the Dundee-based publisher that has a 5.5 per cent stake in Alliance, plans to vote against Elliott Advisors’ resolution to nominate the three new non-executives to the board of the Tayside institution at the annual meeting next Wednesday.

A statement from DC Thomson said: “DC Thomson has been a shareholder in Alliance Trust (AT) for well over a hundred years; like AT, our investment philosophy is based on long-term value creation.

“Of course, as an investor in the investment trust sector, we are always concerned about issues such as governance, capital growth, dividend and underlying costs. These are all issues on which we have challenged, and will continue to challenge the management of all of our investments, including AT. We are satisfied that the board of AT continues to address such issues and this is in some degree borne out by recent performance.

“The Elliott proposals offer board and governance change but, while we welcome open debate, we see nothing in their proposals to persuade us, as long term investors, to give them our backing and we intend to vote against their resolutions to nominate new directors.”