LONDON (Reuters) - Alliance Trust (LON:ATST) will buy back the 19.75 percent of its shares owned by U.S. activist investor Elliott Management, the Scottish asset manager said on Friday, following pressure from Elliott to improve the fund's performance.
The repurchase requires approval by Alliance's independent shareholders and would be done at a 4.75 percent discount, Alliance Trust said in the statement.
Elliott increased its stake in Alliance Trust on Dec. 28, stepping up the pressure on the fund which Elliott said needs a shake-up to improve performance and close the gap between its shares and the value of the assets it holds.
The activist fund forced Alliance Trust Chief Executive Katherine Garrett-Cox, one of the City of London's most high-profile women in business, to step down from the group's board in October 2015.
Elliott, founded by billionaire Paul Singer, is unusual among U.S. hedge funds in targeting foreign firms for its activist campaigns, in which it buys shares in a company and then agitates for changes to how the investee is run.