US corporate raider Edward Bramson is closing in on one of the UK’s oldest private equity groups, Electra, six months after he failed to capture the firm.
The showdown comes amid a flurry of UK activist raids since the turn of the year, underscored by little-known fund Lakestreet Capital, which yesterday revealed it had snapped up shares in logistics firm John Menzies.
Bramson, who invests through a fund called Sherborne Investors, is set for talks with Electra chairman Roger Yates to search for a compromise to his long-held ambition to win a seat on the £1.1bn company’s board.
The 62-year-old, who raised a £100m war chest in February to buy more Electra shares, was comprehensively defeated in a shareholder vote last October but added to his shares last week, meaning another vote would likely go down to the wire.
“He’ll be making it clear something needs to happen,” a person close to Bramson said.
Any deal would face resistance from Electra shareholders, many of whom are happy with Yates’ stewardship of the group. The firm has delivered annualised returns on equity of more than 14 per cent in the past decade.
“We don’t want to see them capitulate to a minority shareholder,” a significant Electra shareholder told City A.M. yesterday.
Meanwhile Lakestreet, which was founded last year and so far owns just over three per cent of John Menzies, said the group is worth £6.75 when it currently trades at £3.63 a share.
The Swiss-based Lakestreet wants Menzies Distribution, its print business, and Menzies Aviation to operate as separate entities.
John Menzies declined to comment.
The barrage of activism comes in the wake of similar activist raids against UBS, Sainsbury’s and Pinewood Film Studios earlier in the year.
On Tuesday US investor Elliott Advisors also claimed victory in a tussle with Scottish investment fund Alliance Trust.
Activist investors buy small stakes in companies and demand management make changes they have suggested.
Bramson has claimed Electra is worth £60 a share when they trade at £31. He has proposed adding himself and ex-PwC chair Ian Brindle to the Electra board.
An Electra spokesman would neither confirm nor deny whether a meeting had taken place.