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The UK investment trust run by billionaire activist investor Dan Loeb has fought back in an ongoing battle with a group of disgruntled investors, pushing back calls for a shareholders meeting.
The board of directors of Third Point Investors Limited (TPIL) rejected the decision to call a general meeting to vote on the shareholders’ proposal to reduce the discount between the trust’s share price and the value of its assets.
Loeb, who is known for his deadly militant fights with companies such as Sony and Sotheby’s, faces a challenge from several of his own shareholders who have complained about the persistent surrender.
Asset Value Investors, a London-based fund manager who owns 10.1% of TPIL, issued a letter in May proposing that investors be allowed to withdraw their shares on a quarterly basis at a level close to their underlying value in order to reduce the discount. TPIL, which acts as a feeder fund for Loeb’s New York-based hedge fund, said the changes would threaten the long-term viability of the company.
The public face-to-face followed tense exchanges behind the scenes. During a call to investors this year, Loeb said he would not bow to shareholders “who are looking to make a quick buck by trying to intimidate or force the board or myself to do so. something that is not in the long term best interests of all investors ”.
Tom Treanor, executive director of AVI, said in May that the comments were “remarkable for their hypocrisy and lack of self-awareness” given Loeb’s long history of advocating for change in the companies he invests in.
AVI last week secured the backing of three small shareholders of TPIL, including Staude Capital and Metage Capital, giving it enough backing to call a general meeting to force a vote on the measures.
But TPIL’s board said on Tuesday that the proposed shareholder vote could not take place because it “would inappropriately undermine the board’s ability and obligation to manage the company.” [and] would have no legal effect ”according to company rules.
AVI said it is consulting with other shareholders and considering its response.
The board said it has already reviewed and rejected AVI’s proposals as part of its strategic review. “Mainly. . . the Council has determined [that] such actions would, over time, significantly reduce the trading float and overall size of the company, making it considerably less attractive to investors and threatening its long-term viability, ”said TPIL.
A share swap facility offered by the board of directors as part of its own haircut reduction plan was supported by shareholders at TPIL’s annual general meeting last week.
However, the meeting revealed signs of dissatisfaction with over 20% of the votes cast against the ease of trade and the re-election of Josh Targoff, General Counsel and COO of Third Point, as management representative. to the board of directors.
The board said the strong performance of Loeb’s strategies and its discount control plan has helped increase the share price by 28% so far this year and close the discount at 12%. against 17% in May.
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