Fighting talk signals time is running out

 
Elizabeth Fournier
“THE fight starts today”. Stirring words from Alliance Trust chief executive Katherine Garrett-Cox yesterday, but is the hyperbole justified?

Management has launched a series of rather overblown arguments against Laxey’s demands, resisting a buyback commitment once its shares slip below a 10 per cent discount to net asset value.

It’s what (some) shareholders want but Garrett-Cox says the so-called discount control mechanism would restrict investment flexibility.

Understandably the Trust would prefer to boost investment and continue buybacks on an impromptu basis.

But the two aren’t mutually exclusive. Investments can be planned around the discount, and since F&C adopted the trigger in 2005 its share price has stabilised.

Shareholders have until 20 May to decide what to do, but with Alliance running out of excuses, it looks like the time is right to drive through change.