Laxey: Many investors support us in Alliance battle

ACTIVIST shareholder group Laxey Partners yesterday claimed it is winning investor support in its battle against the management team of Alliance Trust, the UK’s largest investment trust, led by Katherine Garrett-Cox (pictured).

Laxey has accused the management team of running the company contrary to shareholders’ interests, ahead of full year results to be published tomorrow.

Laxey is pushing for the trust to introduce a discount control mechanism (DCM) to automatically buy back shares if their discount to net asset value – currently at 16 per cent – exceeds 10 per cent.

The group believes the reason Alliance has not yet adopted the system is that the board is afraid of exposing the real amount of total expenses, including salaries, to shareholder scrutiny.

Colin Kingsnorth, Laxey’s co-founder and chairman, told City A.M.: “There will be a very significant vote in favour of our resolutions as we have the support of many major shareholders. They like to think that this is something they can brush aside, but we won’t let it go.”

Alliance chief executive Katherine Garrett-Cox, will issue a statement to investors this week. An Alliance spokesperson said: “The board has always been clear they believe the DCM is not in the interest of the firm’s long term shareholders.”