Alliance Trust fights for independence amid talk of potential AAM takeover

ALLIANCE Trust yesterday stuck to its guns in its fight for continuing independence amid speculation that Aberdeen Asset Management (AAM) has held talks with major shareholders in the group to drum up support for a potential swoop.

Aberdeen, which is led by chief executive Martin Gilbert, is said to have asked key investors in Dundee-based Alliance to sign up to a letter supporting AAM as manager for the £2 billion-plus investment trust.

However, a spokesman for Alliance told The Scotsman: “Shareholders can be assured that the board has considered and will continue to consider the appropriateness of the current internalised investment management of its assets.

“In being self-managed we believe we can better align the interests of our investment team with our long-term shareholders.”

The development comes as Speirs & Jeffrey is understood to have become the third Alliance Trust investor – along with activist shareholder Laxey Partners and Brewin Dolphin – to question the future of Katherine Garrett-Cox as chief executive of the investment trust.

It is also believed that Elliott International, the US hedge fund that owns a 3.48 per cent stake in Alliance, has held talks with 1.7 per cent-holder Laxey over the latter’s shareholder resolution to find an external manager of the trust’s investments.

Garrett-Cox has been dogged by accusations of underperformance at the trust and an Alliance share price that trades at a near-15 per cent discount to the value of its underlying assets.

However, the investment group came out fighting recently, with the biggest dividend hike in 20 years.

The trust revealed the payout alongside 11-month results to change its year-end to 31 December that showed the group delivering a top-quartile total shareholder return.

Alliance unveiled a fourth interim dividend of 2.577p, making a 7.2 per cent annual hike to 9p from 8.395p. with Garrett-Cox saying it was a message to shareholders that “the asset portfolio is in good shape”.

It is said that Gilbert has sought to reassure DC Thomson, Alliance’s biggest investor with an 8 per cent holding, that Aberdeen would safeguard the jobs of several hundred employees the trust has in Dundee, where the Scottish media group is also based.

AAM was unavailable for comment yesterday.