Katherine Garrett-Cox faced a showdown with Elliott Advisors bosses (Source: Flickr/WEF)
Elliott Advisors will call this a win - Alliance Trust may settle for something rather less emphatic.
The day before what was set to be a heated annual general meeting (AGM), the financial services company appears to have reached a truce with one of its largest shareholders by giving it two seats on the board, in return for it withdrawing three resolutions proposing new board members, to be put forward at the meeting.
Shares in the company opened more than one per cent higher, at 525.5p, after Alliance Trust issued a statement to the stock exchange saying it had agreed to appoint industry veterans Anthony Brooke and Rory Macnamara to its board.
In return, Elliott has agreed to withdraw its three resolutions from the AGM and "has committed to support the board and management on all other resolutions".
The board and Elliott have also agreed on certain mutual non-disparagement undertakings and that Elliott will not call a general meeting or seek to agitate against the company, its board or management publicly until after the company's 2016 AGM at the earliest.
The news will come as something of a relief for embattled chief executive Katherine Garrett-Cox
, who was facing a major showdown with her shareholder. However, Leith Khalaf, a senior analyst at Hargreaves Lansdown
, suggested the move might upset other investors.
"[They] may justifiably feel a bit miffed,", he said. "Some of them will have taken time to examine the issues before casting their vote, only to have the decision taken out of their hands at the last minute. They also have to contend with the uncomfortable fact Alliance Trust has told them the two people it now plans to appoint to its board are not independent."
Nevertheless, Alliance Trust's chair, Karin Forseke, gave an uneasy welcome to her board's two new members.
"On behalf of the whole board, I would like to express my gratitude to our shareholders for engaging with us on this important issue. Having considered this feedback we have worked with Elliott to find a compromise which we believe is in the best interests of all our shareholders.
"I would also like to welcome Anthony and Rory to the board where their significant experience will be a considerable asset."