BELEAGURED F&C Asset Management is facing down a bid by activist investor Sherborne Investors to remove its chairman Nick MacAndrew from the board.
Guernsey-based Sherborne also wants to remove director Brian Larcombe, installing in their place its founder Edward Bramson, chairman Ian Brindle and an independent director, Derham O’Neill.
The move is the latest salvo in a creeping acquisition strategy by Aim-listed Sherborne since it took a 5.2 per cent stake in F&C in August. It has now raised its stake to more than 17 per cent, a combination of 9.9 per cent voting shares and 7.6 per cent in contracts. It has invested about £54m.
F&C has underperformed its peers since enduring a long period of uncertainty over its ownership and Sherborne, a turnaround house, views it as substantially undervalued.
Sources told City A.M. F&C’s board was “clearly frustrated” by the move.
“It has a strategy that is gaining traction and this is having a destabilising influence again,” one said. “They are opportunists, but they are not proposing any alternative strategy.”
But F&C’s share price has climbed substantially since August and is now trading at almost double its lowest point this year in June .
Friends close to Sherborne said the investor believes F&C has an “excellent business and excellent brand” but could achieve more.
“Just look at the historical underperformance of the share price. Look at the rating relative to its peers,” a source said. “They are not in it for a quick buck – they are implementing a strategy that works and has delivered long-term value in other companies.”
In a statement MacAndrew slammed the move, saying the board was “unanimously of the opinion that Sherborne’s proposals are not in the best interests of F&C’s shareholders.”
Sherborne has used this strategy at firms such as telecoms services firm Spirent and chemicals maker Elementis.