Private-equity firm Electra is set for a public showdown with activist investor Edward Bramson today as he called a shareholder meeting in a bid to grab two seats on the board.
Bramson’s Sherborne Investors vehicle has built a 19% stake in Electra, whose portfolio of assets includes holiday parks owner Park Resorts, builder Cala Homes and footwear brand Hotter Shoes.
But his methods have proved controversial as Sherborne has previously been accused of attempting to win operational control of companies without paying a premium.
A bitter campaign succeeded in 2011 when he was installed as head of F&C Asset Management, although he sold down his stake in private-equity firm 3i without a fight last year. In July he demanded three seats on the Electra board and the mandate to carry out a strategic review, although his intentions remain unknown.
Electra rejected his plans and now Bramson has called an extraordinary meeting to ask shareholders to vote himself and Ian Brindle, who until last year was chairman of Sherborne, onto the board.
He also wants current board member and private-equity veteran Geoffrey Cullinan voted off, effectively giving him two of seven seats, although he offered no further hint on his plans today.
Electra, whose other board members include former Bank of England rate-setter Kate Barker, insists it wants to maintain an “open dialogue” with shareholders. But it believes the presence of Bramson, a major stakeholder, and Brindle would jeopardise its policy of an independent non-executive board overseeing Electra’s main fund.
Liberum analyst Conor Finn said: “We cannot clearly see at present what material additional shareholder value could be added post a strategic review of the company, and await communication from Sherborne on the matter.
“The walls of the Electra private-equity castle are strong, (justifiably so in our view) and scaling the ramparts will be a significant challenge for Sherborne’s army, unless a trojan horse of opportunity can be presented.”
The company stressed Electra’s returns had been more than double the increase in the FTSE All-Share in the past 10 years.
