Elliott Advisors has revealed that it rejected a bid from Alliance Trust to buy out its entire stake 17 months ago.

The activist shareholder, which now holds 12per cent of the 127-year-old trust, was responding to claims by Alliance's chief executive Katherine Garrett-Cox that "from the first time I met them and at every meeting since, Elliot has made it clear that they are looking for an opportunity for an exit".

The hedge fund's spokesperson said Alliance Trust's brokers had written to Elliott in November 2013 to bid for its entire shareholding. "We rejected the bid, and have increased our shareholding since."

Ms Garrett-Cox, in an interview with the FT, had called Elliott's claim that it was a long-term shareholder "nonsense".

She said Elliott had "also made it clear that dividends, which are an artery for a huge swath of our investor base, are a waste of time, which is incredibly short term".

The hedge fund responded: "Elliott is a long-term shareholder in the company, and has been the largest buyer of shares in the market since 2010. We have met directors of the company on over 20 occasions, including attending all the annual general meetings in person, since we first became shareholders."

It added that it was aware of the importance of dividends to shareholders and had "never specifically proposed to the company that it should amend its dividend policy". It would like to see a more attractive dividend yield "as long as such a policy is sustainable and not at the expense of long-term capital preservation and growth".