LONDON, July 29 (Reuters) - Electra Private Equity said it has rejected activist investor Edward Bramson’s request to join its board and lead a strategy review of one of Britain’s oldest private equity firms.
Known for shaking up managements at his target companies, Bramson has built up a stake of around 19 percent in Electra since February via his investment vehicle, Sherborne Investors.
Electra’s Chairman Roger Yates and non-executive director Geoffrey Cullinan met Bramson on July 24 to discuss the proposals, including the nomination of himself and two other new directors.
“The board of Electra actively keeps the company’s strategy under regular review, is of the opinion that the current strategy has delivered consistently superior long-term returns for all shareholders and sees no reason to deviate from this successful strategy,” the company said.
Sherborne Investors declined to comment.
Electra, whose private equity investment trust was listed on the London Stock Exchange in 1976 and now has a market value of 938 million pounds ($1.59 billion), has delivered a share price total return of 268 percent over a 10-year period to March 31, more than double the return of the FTSE All-Share index.
Max King at Investec Asset Management, one of Electra’s twenty-biggest shareholders, said he supported the board.
“We see no need for a ”strategic review“... Mr Bramson’s request implies some unspecified change of direction, the need for which is far from apparent. Any change is more likely to be for the worse than the better, in our view,” King said.
JPMorgan analysts said Electra was right to reject Bramson’s request.
“Just what is it about the market-beating performance that makes the existing strategy in need of Mr Bramson’s strategic review?” they wrote in a note to clients.
Electra had more than 1.5 billion pounds of assets under management on 31 March, according to its half-year report.
In 2011, Bramson led a boardroom coup at British firm F&C Asset Management, ousting the chairman and pursuing a root-and-branch shake-up of the 144-year old company after years of share price underperformance. ($1 = 0.5887 British Pounds) (Reporting By Anjuli Davies)