In a latest example of rebel shareholders pressurizing the fund manager, British activist hedge fund Laxey Partners has demanded operational changes in Alliance Trust, in an effort to boost the company’s share prices.
Laxey published the letter that it had sent to Alliance Trust on January 27. It has demanded that Alliance should change its “shareholder enfranchisement facility” (SEF) savings scheme and set up “discount control mechanism” (DCM) for better share price realization.
Accusing the Alliance director’s of gaining unfair advantage over other shareholders in the present form of SEF, Laxey said that the DCM mechanism would ensure that the shares would reflect the value of the company’s assets more closely.
“We believe the stock market views both the lack of a DCM and the SEF as a ‘poison pill’ which is depressing the price of your shares”, said Laxey in the letter adding that it plans to arrange for a shareholders’ meet to discuss these issues.
Laxey’s latest move comes close on the heels of another activist investor Edward Bramson ousting the chairman of F&C Asset Management and pledging to clean up the British asset management firm.