The managers of Strategic Equity Capital (SEC) have sought to quash efforts by rival Harwood Capital Management to take over the £140 million smaller companies investment trust.
The trust's former manager Stuart Widdowson quit GVQ Investment Management last month to form a new fund management business with Harwood founder Chris Mills (pictured).
Strategic Equity Capital's board said in a statement to the market it understood 'Harwood Capital Management and its representatives, of their own volition, are speaking to the company's shareholders with a view to promoting a scheme that would result in Harwood, or an affiliate thereof, managing some or all of the company's assets'.
'The board has been advised by its manager, GVQ, that Stuart Widdowson [pictured] will not be in a position to put himself forward to manage some or all of the company's assets for a period of up to 18 months pursuant to the terms of his employment with GVQ,' it added.
Harwood responded that GVQ's stance on Widdowson's position was 'an extreme simplification of the situation', adding that Mills, manager of the North Atlantic Smaller Companies (NAS) and Oryx International Growth (OIG) investment trusts, could run the assets until Widdowson was in a position to do so.
'It is disappointing that [trust chairman Richard] Hills has declined or ignored on more than one occasion an invitation to discuss with us, or our solicitors, a way forward for SEC which would enable shareholders to decide which fund manager they would wish to look after their money by splitting the trust into two new entities pro rata to shareholder election.'
SEC share dipped half a penny to 199.5p. They trade at 15% below net asset value, with the discount doubling its one-year average since news of Widdowson's departure.