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Bramson's Sherborne resumes fight with Electra

Activist investor Edward Bramson has raised £100 million to renew his campaign against Electra Private Equity investment trust.

Bramson's Sherborne resumes fight with Electra

Activist investor Edward Bramson has resumed hostilities against Electra Private Equity (ELTA ).

Last night his investment fund Sherborne Investors (SIGB) raised £100 million in a share placing and said after repaying debts it would use the proceeds to increase its stake in Electra, currently 24%.

Guernsey-based Sherborne has also written to Electra, renewing its proposals to appoint Bramson and two other directors to the investment trust’s board and to review ways of increasing shareholder value. If discussions on these points are unsuccessful it has threatened to call another extraordinary general meeting.

Although Electra shareholders rejected Bramson’s proposals at an extraordinary general meeting (EGM) last October, a second showdown could be much closer.

Analysts at Liberum estimate Sherborne now has an extra £55 million to buy Electra shares, which could increase its stake to just over 30%. Assuming the shares it has recently bought were from investors who backed Electra, Sherborne’s support could rise from 38% to 45% at a second EGM.

Liberum analyst Rob Jones said ‘we would still not expect Bramson to win the vote, assuming an EGM is called. However, the margin is likely to be much tighter than ELTA would desire, and additional advisor costs will undoubtedly be incurred.’

Sparks could fly before that, however. Electra is due to hold its annual general meeting on 16 March and Sherborne could vote against the re-election of its directors. 

Sherborne wrote to Electra requesting a meeting with its chairman Roger Yates following the conclusion of its strategic review this month, in which it announced measures to cut £11 million from annual costs and to resume dividend payments after a 16-year gap.

Bramson has said previously Electra could generate £1 billion of additional shareholder value from running its investments more efficiently, a claim Yates rejected as 'exuberant'.

Shares in Electra today jumped 2.4% or 73.5p to £31.36 as the trust announced Yates would meet Bramson. This leaves the trust trading at a 4% discount below its last net asset value (NAV).

Excluding 3i, which trades on a 33% premium above its NAV, due in part to stake building by Sherborne during the private equity giant's turnaround two years ago, Electra has the highest rating among private equity trusts. Over three years its shareholders have received a total return of 88% on their investment.

1 comment so far. Why not have your say?


Mar 02, 2015 at 16:37

Speaking as an Electra shareholder since 2011, 88% over three years will do me nicely.

If it ain't broke, Mr Bramson, don't fix it.

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