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Alliance beats Laxey 2:1 in AGM battle
Shareholders have overwhelmingly backed Alliance Trust in its battle against activist hedge fund Laxey Partners.
Shareholders have backed the management of Alliance Trust in its battle against activist hedge fund Laxey Partners.
In a packed annual general meeting in Dundee today Alliance Trust (ATST.L ) shareholders voted two to one in favour of chief executive Katherine Garrett-Cox (pictured above) and the Alliance board.
Laxey Partners, led by Colin Kingsnorth (pictured above), had called for the imposition of an automatic share buyback scheme to improve shareholder returns.
Laxey had also called for the reform of Alliance's voting structure, which they said enabled management to control the trust via holdings in its savings business.
In the end both Laxey resolutions were defeated by 67% and 69% of shareholders respectively.
Nevertheless, the revolt will be seen as significant with a third of shareholders supporting Laxey's call for change.
Lesley Knox, the outgoing chairman of Alliance Trust, said: 'The close to 60% turnout we saw at this year's AGM was unprecedented, being nearly double our normal turnout.'
She said: 'We will continue to focus on our key priority of improving the investment performance. We have also today confirmed our commitment to the ongoing flexible use of share buybacks. The step-change in the company's active use of buybacks in recent months will continue, taking into account the company's discount relative to the peer group.'
Knox who has chaired Alliance Trust's board for 10 years is stepping down in a move described as part of normal succession planning.
The scale of Alliance's victory is greater than some expected. Yesterday a poll of Citywire Money readers indicated that Alliance would win although not by a huge margin. However, Alliance has been forced to pick up the pace of its share buybacks which will please Laxey and its supporters.
James Hart, co-manager of the £70 million Cayenne Trust, which has a stake in Alliance, said of the vote for Laxey: ‘I think that’s a significant minority. Anyone sensible expected this to lose but a revolt in the mid 30% is a significant vote against the board.'
He added: ‘It’s not going to change anything, you’ve got to remember that Alliance is a bit of dinosaur and its going to change by evolution rather than revolution.’
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