Alliance Trust buys back further £48.3m of shares

ALLIANCE Trust yesterday confirmed it spent £48.3 million acquiring 12.7 million of its own shares last month after it faced down a major shareholder revolt at its recent annual meeting in Dundee.

More than a third of the trust's shareholders sided with activist investor Laxey Partners at its AGM, supporting demands that the board, led by chief executive Katherine Garrett-Cox, introduce a formal mechanism to buy shares whenever the discount to net asset value was above 10 per cent.

Alliance said the May buy-backs mean it has acquired about 2.7 per cent of its shares since the beginning of the year at a cost of 67.7m. Its discount has narrowed from 17.1 per cent at the year end to 15.3 per cent in the first quarter to the end of April.

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The firm said that the "step-change" in its buy-back policy would continue "taking into account the company's discount relative to the peer group".

The trust's chairman, Lesley Knox, who was understood to be resistant to a buy-back scheme, will retire from her post after ten years at the next AGM. The Dundee group confirmed that the search for her replacement was "already under way".

The 2.5 billion trust said it would shift its year end from January back to December "in order to aid comparability with other trusts".

As a result, dividend payment dates are being brought forward, with the first interim dividend payable on 30 June and further payments of 2.141p at the end of September and December.

The firm said a fourth interim payment of "at least" 2.141p would be made at the end of March 2012, making a total of 8.56p or more, a minimum increase of 2 per cent on last year.

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