Laxey wants end to Alliance Trust 'poison pill'

7th Feb 2011 07:37

Activist investor Laxey Partners has formally proposed Alliance Trust make changes to its voting system and introduces a method to reduce the discount of the share price by putting forward resolutions on the issues on the agenda of the AGM in May.Laxey wrote to Alliance's board in November asking that shareholders should have the right to debate both issues, but after this was rejected it said today it was 'compelled' to table the resolutions.Laxey wants Alliance to put in place a mechanism that ensures that the shares trade at not less than 90% of asset value. It says other comparable investment trusts have 'discount control mechanisms' or DCMs.The investor also wants changes to the Alliance Savings Scheme "Shareholder Enfranchisement Facility". It claims the scheme means directors and management of Alliance can control more votes than they are entitled to as uncast votes are cast in proportion to those that are cast. The Savings Scheme represents about 21% of the trust's shares, yet Laxey believes only 0.5% of savings scheme investors vote."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. We also believe that a vote to introduce a DCM and to address the inequality of the skewed voting SEF will significantly improve the rating of Alliance to the benefit of all shareholders," it said.