ALLIANCE Trust is understood to have won the backing of long-standing investor DC Thomson as it fights moves by rebel shareholder Elliott Advisors to shake up the venerable investment firm.
The development emerged as Alliance chief executive Katherine Garrett-Cox declared it will not be "bullied" into meeting the demands of the US hedge fund manager.
Elliott, which has a 12 per cent stake in Alliance, is seeking shareholder support to appoint three non-executive directors to the board, citing concerns over the performance of the 127-year-old Trust.
Alliance has dismissed the challenge, defending its performance and declaring that the individuals proposed by Elliott cannot be considered independent because they have been selected by a recruitment process initiated and paid for by the hedge fund manager.
Now it has emerged the Alliance board has the support of Dundee-based DC Thomson, publisher of The Sunday Post and the Beano, which holds a six per cent stake.
Alliance and DC Thomson have a long-standing relationship and a shared business philosophy, which is understood to be at odds with the tactics being used by Elliott.
As the war of words between Alliance and Elliott Advisors intensified, Ms Garret-Cox said the Trust would not be "bullied into doing something just because someone stands up and shouts at us". She warned shareholders Elliott's proposals to install three non-executive directors were the "thin end of the wedge", and claimed the appointments would be "one step towards something that out shareholders are very unlikely to want."
The Alliance defence alarmed investor Brewin Dolphin, holder of a 4.4 per cent stake, which criticised the Trust for embarking on a "cynical campaign" to denigrate the directors Elliott is proposing to install. However, an English newspaper has alleged that two of the three proposed directors have direct links to Alliance, casting doubts on their independence.
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