Electra's shareholders shun U.S. activist Bramson


(Reuters) - Shareholders in Electra voted on Monday to reject Edward Bramson's request to join the board, settling a standoff between the New York-based activist investor and one of London's oldest private equity funds.

Bramson's Sherborne Investors is Electra's largest stakeholder with a 20 percent holding. Bramson, who attended Monday's meeting of shareholders, had pledged a shake-up of the fund, promising to more than double its market value.

In a series of setbacks for the softly-spoken Bramson, shareholders also rejected the proposed appointment of former Sherborne chairman Ian Brindle to the board, and the removal of non-executive director Geoffrey Cullinan.

Electra's shares fell 2.3 percent after a meeting in London's historic Saddlers Hall, which lasted less than an hour.

"He had no insights, no thoughts, no opinions, no plans - nothing whatsoever," a representative of Investec Asset Management told the meeting, referring to Bramson's efforts to win their support.

Bramson's campaign does look likely to lead to changes at Electra, which traces its roots back to 1935 and whose holdings range from holiday parks operator Park Resorts to retailer Hotter Shoes.

Electra said that it would launch a review of fees and capital structure as a result of its meetings with shareholders, led by Chairman Roger Yates.

"Obviously we're pleased with the support we got from shareholders," Yates said in a telephone interview with Reuters. "However we've got to make sure we leave no stone unturned in continuing to deliver the value."

"Whatever the opposite of complacent is, this board is it."

Sherborne indicated it would continue to press its case for reform.

"Sherborne Investors looks forward to hearing more from the Board of Electra about the resultant actions from this review," it said in a statement.


The saga began in February, when Sherborne first revealed its stake in the private equity fund. In July Electra rejected a request by Bramson to join the board and lead a strategic review.

The suggestion that Electra required a revamp surprised some analysts - the fund delivered an annualised return on equity of 14 percent over the 10 years to the end of March 2014, hitting its target of between 10 and 15 percent.

Not to be deterred, Bramson submitted a September letter to Electra shareholders, saying that a reorganisation of the company could create more than 1 billion pounds ($1.6 billion) of shareholder value and take the share price to around 6,000 pence each - more than double its current levels.

The case bears strong similarities to Bramson's tilt at F&C Asset Management, another venerable British fund. Bramson seized control of the firm in a bitter 2011 boardroom coup, with promises to turn the company around.

F&C shares surged by almost 120 percent from August 2010, when Bramson's stake building began, to when he stepped down as chairman in August 2013, compared with a 50 percent rise in the FTSE Mid cap index over the same period.

Although Electra has won this battle, Bramson is set to remain an influence.

"Electra is a good example of a board being well prepared and not scared to engage," said Charlie Jacobs, M&A partner at Linklaters.

"Bramson and his claims do not just disappear now – the shadow of the activist is still there and the board will still need to be there delivering value."($1 = 0.6249 British Pounds)