3i builds up its defence against corporate raider

 
p53 Agent Provocateur
Getty
31 January 2013
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Britain's oldest private-equity firm 3i today showed how it might fend off corporate raider Ed Bramson if he decides to take a punt at the company, as is widely expected.

Simon Borrows, the group’s chief executive, said in a third-quarter update that “strong and measurable progress” had been made restructuring the business since he took over last year.

The company, which owns lingerie chain Agent Provocateur and restaurants chain Giraffe, said it expected to beat cost-cutting targets this year and would focus on asset disposals over the coming months. Net asset value rose 4.8% to 286p a share.

Earlier this week, 3i revealed that Bramson’s Guernsey-based Sherborne Investors had built up a sizeable stake in the 67-year-old firm.

Bramson is best known for his boardroom coup of F&C Asset Management, managing to take control without a full-scale takeover bid. He ousted the chairman and eventually the chief executive. 3i declined to comment any further on Sherborne’s plans but confirmed it had not yet held discussions with Bramson.

Some investors expect a battle for control of the company to unfold over the coming months, although one analyst suggested Bramson could step back if the firm’s performance continues to improve.

3i is likely to resist any demands for change having seen off a separate assault from Laxey Partners, another activist investor, last year. Since then, the company has cut 190 jobs and diversified into new areas under the leadership of Borrows, a veteran banker.

One of Sherborne’s biggest backers, Aviva Investors, today indicated it would back an assault at 3i. “Ed Bramson has done a great job for us, not only at F&C but also at the other companies where we previously supported him,” David Lis, head of UK equities said.

“Hence our decision to back him once again by acquiring almost 20% of his new vehicle.”

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