FTSE in-depth: Katherine the great is raided

By Geoff Foster for MailOnline
Updated: 03:19 EDT, 31 March 2011

Katherine Garrett-Cox already had a major problem, now she has an even bigger one.

Great challenge: Katherine Garrett-Cox.

The chief executive of Dundee-based Alliance Trust, who was nicknamed 'Katherine the Great' during her early stellar career, needed news that another activist shareholder has raided the group's share register like a hole in the head.

However, the announcement that US hedge fund Elliott International has acquired a 3.1% stake, or 19.9m shares, in the investment trust left the shares 5p better at 363.9p.

Elliott International is a brother hedge fund to Elliott Advisers which itself has built up a 17% stake in bus and rail group National Express (5.4p up at 248.6p) and is now calling for a boardroom revamp and a big say in its future.

Elliott's move on Alliance Trust suggests it will go down exactly the same route and call for a big corporate change at Alliance.

Garrett-Cox and the board of the 123-year-old investment trust, which recently suffered the ignominy of seeing it kicked out of the prestigious Footsie index, has already come under attack from Isle of Man based activist shareholder Laxey Partners.

It recently sent a letter to other shareholders saying Alliance should set up a mechanism to limit its shares discount to net asset value and change the voting process in its savings scheme.

Needless to say, Alliance has rejected Laxey's demand and has called for shareholders to vote against the two proposals at the AGM in May. Since then it has also announced plans to shut down its private equity unit to focus on its stock and bond investments.

British Gas parent Centrica advanced 8.1p to 330.7p amid whispers of a possible bid from Iberdrola. Russian giant Gazprom has always been the name in the frame but off the wall gossip suggested that the Qataris are interested in buying a 10% stake which it would pass on to the Spanish utility should it decide to bid.

Centrica is rumoured to be on the acquisition trail itself and has both Scottish and Southern Energy (5p easier at 1262p) and Npower, part of Germany's RWE, on its radar.

On the penultimate trading day of the first quarter, the fabulous Footsie came within 30 points of 6,000 before closing a further 16.13 points to the good at 5948.3. Wall Street added 50 points in the early stages and is well on course to record its best quarter since 1998 in the face of increasing tension in the Far East and growing concerns about the nuclear repercussions of the earthquake and tsunami in Japan.

Mining stocks were buoyed by Jiangxi Copper's forecast that it expects copper consumption to rise by 10-12% this year and plans a 60% rise in its own production by 2015. Vedanta Resources added 76p at 2314p.

A cold wind blew through the High Street following a shock profits warning from Currys-and-PC World electricals group Dixons Retail, 3.06p down at 13.69p. It blamed worsening trading conditions in its main UK market and this sparked fears that things could get a lot worse if consumers keep a tighter hold on their purse strings.

Rival Kesa Electricals, which owns Comet, fell 7p to 124p in sympathy.

Marks & Spencer slumped 10.6p to 340.7p on talk that next Wednesday's trading update will be disappointing and prompt a raft of earnings downgrades. Rival Next shed 54p at 2011p. WH Smith fell 13.3p to 445p on a cautious Collins Stewart note.

Clients of Investec turned sweet on Tate & Lyle, 10.5p up at 559.5p, after the broker advised a purchase ahead of today's pre-close trading update. Its target price is 600p.

Buyers chased Deltex Medical 5p higher to 29.75p after Britain's healthcare cost-effectiveness agency NICE issued final guidance recommending its blood monitoring device CardioQ-ODM.

Chief executive Ewan Phillips said NICE's final guidance is 'a resounding endorsement for the system at a time when the NHS is charged with delivering £20bn of efficiency savings over the next four years'.

Profit-taking in the wake of record annual results left Judges Scientific 25p cheaper at 470p. Profits soared 75% to a peak £2.75m on revenues of £16m. A final dividend of 5p makes the total 7.5p, up 50% on 2009.

Broker WH Ireland is a fan and says a share price of £5 is more representative of the value and growth potential that exists within the business.

YCO, the provider of specialist services to superyachts, added 71.38p to 12.88p following a bullish trading update. The company forecasts 2010 profits of £900,000, up from £31,000. Cash in the bank is £500,000.

News of the dividend cut to 10p from 14.6p left Charles Taylor Consulting 19p lower at 140p. David Marock has been appointed new chief executive and he has industry and a McKinsey background. Shareholders must hope he will turn things around.