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Electra comes out swinging against 'divisive' Bramson

The board of Electra has blasted Sherborne Investors' renewed attack on the management of the private equity trust.

 
Electra comes out swinging against 'divisive' Bramson

The board of the Electra Private Equity (ELTA ) investment trust has blasted Sherborne Investors' renewed attack on the management of the fund as ‘void of substance’ as the activist manager renews its attempt to gain board seats.

Sherborne, headed by veteran activist Edward Bramson, failed in its previous attempt last year but has been buying up a bigger stake in the trust and has requisitioned an extraordinary general meeting.

‘Sherborne has been invested in Electra for 21 months, yet has singularly failed to make a case for changing its proven, highly successful model,’ said trust chair Roger Yates (pictured).

‘Despite repeated requests to share his analysis, Mr Bramson has declined to explain how he would run the business better, offering merely a void of substance in lieu of a credible plan.

‘His presence on the board would potentially be divisive and value destructive and, accordingly, the board urges all shareholders to vote against the Sherborne resolutions.’

Yesterday Electra announced one of its portfolio companies, Axio Data Group, had agreed to sell Asian healthcare information business MIMS for $250 million (£163 million), a boost that analysts at Investec said had come 'at a convenient time' in 'a very active year' for the trust.

'It will be interesting to see the outcome of the vote, given the size of Sherborne's holding, and that it is now 21 months since the position was initiated, making it by no means a short-term holding.'

Analysts at Numis said that despite the trust's strong long-term performance, it now looked vulnerable to a Sherborne victory.

'We believe the odds are now stacked against the board and it will need an extremely high turnout to defeat Shernorn's proposals, they said.

'At the time of the last general meeting in October 2014, Sherborne Investors held a stake of c.20% and received support equivalent to 38.2% of votes cast last year, or 31% of the share capital.

'Assuming that Sherborne still has the support of a further 11% of the share capital (reflecting Edward Bramson’s strong following among a number of the UK’s largest institutional investors), it would now have backing from 41% of the share capital, giving it just over 50% of a vote assuming a similar turnout to the last extraordinary general meeting of 81.1%.'

Citywire columnist James Carthew has criticised Sherborne for its long-running campaign to secure places on the board 'without explaining why anyone thinks this is a good idea'.

‘I think it would be a great shame if they succeeded in their aim, but the vote will presumably be closer than it was last time as Sherborne owns a few more shares than before,’ he recently wrote.

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