A multi-million-pound investment trust has found itself embroiled in a fight with a major investor which is seeking to overhaul its board following a slump in the share price.
The Gore Street Energy Storage Fund, which invests in massive battery projects in the UK and other countries such as the US and Germany, is listed on London’s main stock market and is worth £323m.
But RM Funds, the firm’s second-largest investor, launched an attack on the business on Wednesday evening, calling a shareholder meeting to oust two of its directors and install hand-picked replacements after private talks between the two sides broke down.
In a statement to the stock market on Wednesday evening, RM accused Gore Street’s board of presiding over a ‘sustained underperformance’ in the share price, which has fallen 46pc over the last three years, as well as citing ‘ongoing concerns’ about the firm’s governance and strategy.
The fund manager, which holds a 5pc stake in Gore Street, said it had been in talks with the company for over six months but its proposals for a boardroom overhaul had been rejected, leaving it with ‘no choice’ but to table a shareholder meeting.
UK-listed Gore Street Energy Storage Fund owns and manages energy storage assets in the UK, Ireland, Europe, and the United States
RM has called for two of the firm’s non-executive directors, Patrick Cox and Caroline Banszky, to be removed and replaced with its own nominees in order to ‘restore shareholder confidence.’
It has also proposed that Gore Street sell some of its assets and appoint advisors to evaluate options for a potential sale or merger of the business.
‘RM believes a refreshed board – unconnected to past strategic decisions – is best placed to lead a credible, independent review of the company’s options,’ the fund manager said.
Gore Street did not respond to a request for comment.
The assault means Gore Street now joins a growing list of London-listed investment trusts that have found themselves under pressure from activist investors.
Late last year, seven trusts found themselves under attack from US hedge fund manager Boaz Weinstein, who called on investors to oust the boards of their respective trusts and appoint himself and his allies in their place.
In the end, shareholders rejected his campaign with votes at all seven trusts ending in defeat for Weinstein’s firm Saba Capital.
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