Alliance buys £620m stake to end Elliott era

Alliance Trust closed the chapter on the tangle with US activists Elliott after agreeing to buy back its £620 million stake.

The Dundee-based trust, formed in 1888, will purchase the shares over five days at a 4.75% discount to the present value of Alliance’s basket of stocks if shareholders agree.

Elliott had been stuck with a block of shares after emerging victorious from a vicious campaign to shake-up Alliance’s boardroom, an assault which led to the exit of former chief executive Katherine Garrett-Cox.

The US investor said corporate governance had “improved” since it first bought shares in 2012 and the discount had narrowed from 15% to around 5%.

Alliance has been slowly buying back the shares of other investors over the past few weeks to narrow the discount.

Numis analyst Charles Cade said Elliott could have been a “thorn in the side” of Alliance if it failed to buy the company’s shares.