Electra investors reject Edward Bramson's board seat bid

Shareholders in UK private equity fund Electra have voted to reject activist investor Edward Bramson's request to join the board.

Sherborne Investors, Bramson’s investment vehicle and Electra’s biggest shareholder, had forced the meeting in an attempt to instigate a strategic review which he said could increase the value of Electra by £1bn.

The corporate raider – who had success in the turnaround of F&C Asset Management – had pushed for him and the former PwC chairman Ian Brindle to join the board and the removal of non-executive director Geoffrey Cullinan.

In a meeting at Saddlers Hall in the City of London, Mr Bramson was defeated on all of the resolutions he proposed.

Shortly before the meeting, City veteran Edward Bonham Carter, chief executive of Jupiter Asset Management and the brother of Hollywood actress Helena Bonham Carter, backed the board.

Mr Bonham Carter, who began his career at Electra said that “if Mr Bramson thinks there is £1bn of hidden value he should make a bid for the company. If he wants to control the business then I would suggest he do it via a bid rather than from a minority position”.

Max King, at one of Electra's largest shareholders, Investec Asset Management, also told the room that he had met with Mr Bramson prior to the meeting and he believed the activist was “in a poor position” to take a view on Electra’s business as he had not visited a single of the private equity firm’s portfolio company sites.

Mr King said that Bramson’s presentation was made of “flimsy numbers pulled out of thin air”.

Mr Bramson remained silent at the meeting telling The Telegraph that he would “wait and see” the result. Mr Bramson waited for all other attendees to take their seats before making his entrance with five of his associates. He left, without word, shortly after the results of the vote were announced.

Electra chairman Roger Yates made a show of personally greeting and hand shaking Mr Bramson during the break in which the votes were cast.

These revealed that over 61pc of shareholders voted against electing Mr Bramson and Brindle to the board, while over 63pc opposed the removal of Cullinan. There was an 81pc turnout at the meeting.

However, despite Mr Bramson’s immediate defeat the activist gained a victory as the board of Electra announced after the meeting that it would “launch a review covering the fee arrangements with Electra Partners as well as the capital structure and distribution policy of the Company.”

Electra’s remuneration policy was one area of focus for the activist.

Sherborne responded with an emailed statement: “Sherborne Investors notes today’s announcement from Electra and the intention of the board of directors to launch a review covering the fee arrangements with Electra Partners as well as the capital structure and distribution policy of the company.

“As a major shareholder representing funds with a 20 per cent shareholding in Electra, Sherborne Investors looks forward to hearing more from the Board of Electra about the resultant actions from this review.”

Rob Jones, equity analyst at Liberum said: “Shares are down a couple of percent now, back close to the level that Bramson originally bought in at. I believe this may be due to some people expecting Bramson to sell his position, and hence potential future selling pressure on the shares.”

Roger Yates, chairman of Electra, said that the board was "pleasd but not complacent" following its defeat of Bramson. Mr Yates said that the activist's campaign had given the board a "terrific opportunity to speak to shareholders and understand their level of support and also any concerns."

He added that the boar would continue to "respond vigorously" to any shareholder feedback.