On 15 January, Charter European Trust (CET), a £400m pan-European investment trust, received a hostile approach from Henderson Global Investors, one of the giants of the sector.
Henderson planned to remove the CET board, install its own and then merge the trust with its own European continental investment trust - Henderson Eurotrust.
Henderson called for the board to arrange an Extraordinary General Meeting within 28 days.
The Maitland Consultancy, which advises Merrill Lynch and New Star among others in this field, won a competitive pitch to handle CET's financial PR surrounding the takeover bid.
The Maitland account team - chairman Angus Maitland, senior consultant William Clutterbuck and consultant Fiona Piper - reported direct to CET chairman David Benson.
CET has around 10,000 small shareholders, who make up 50 per cent of the total shareholding. Henderson had the support of 29 per cent of CET shareholders, including three institutional investors: Standard Life, Equitable Life and its own existing shareholding.
The CET board was forewarned by Henderson just a few hours before the announcement went on the Regulatory News Service (RNS).
Its immediate reaction was to put a brief statement on RNS to acknowledge the proposals and then to study them in detail.
At this stage, the message was for shareholders to do nothing until the board had reviewed its options.
During the following two weeks, journalists were told that CET would make an announcement when it had reviewed all the opportunities.
This gave Henderson and its PR team - Financial Dynamics - the opportunity to push their proposals with the media, ranging from the national press to specialist publications such as Money Marketing, Financial Adviser and Investment Week.
Most editorial during this period opined that CET was in a difficult position, with 29 per cent of the vote backing the Henderson proposals and a large private shareholder base that is not renowned for taking an active part in voting.
On 4 February, the CET board announced its own proposals, which included a reconstruction of CET that offered shareholders the opportunity to exit with 100 per cent of their cash or reinvest in a similar newly reconstructed trust.
Maitland made an announcement at around 4.45pm, arranging for journalists to talk to the board. The aim of this timing was to ensure the details of CET's proposal were outlined without the opposing side having the opportunity to attack them in the press. The battle to win the vote was then on.
To have all shareholders understand that the CET board's proposals were positioned as the best value for all shareholders (not just the three institutional investors) and encourage as many votes against the proposals as possible.
Strategy and Plan
The messages Maitland developed for CET evolved from finding out what investors wanted and why the proposals from Henderson were not in most shareholders' interests - a central theme throughout.
Key messages were as follows: that the CET board's proposals guaranteed shareholders the opportunity to receive cash for 100 per cent of their shares; that they offered more cash per share to shareholders because of lower implementation costs, a continuing pan-European investment, managed by Dresdner RCM (whose financial PR is handled by Lansons Communications, which had limited involvement in this campaign) and a quicker implementation timetable; and that the proposals addressed the interests of shareholders as a whole.
According to Piper, Maitland maintained 'almost daily' contact with City and personal finance correspondents at national newspapers to explain the CET board's proposals.
Maitland also sought to draw attention to weaknesses in the Henderson proposals.
The PR strategy sought to rally smaller retail shareholder support through independent financial adviser publications and the national press.
A few days before the vote, it seemed that the CET board had a tough task to overthrow the 29 per cent.
Measurement and Evaluation
The press campaign would be judged on the voting at the EGM on 1 March.
A majority of votes was needed by each side, so the success of the PR campaign would depend on whether the smaller shareholder vote had been mobilised and how the votes had been cast.
The recommended proposals put forward by Henderson were rejected, with 53.8 per cent of shareholders voting for the board and 46.2 per cent backing Henderson.
There was a turnout of more than 70 per cent of CET shareholders.
Press coverage of the vote was positive for CET.
The Daily Mail ran a piece headlined 'Benson's Victory' after the CET chairman had argued on behalf of the private shareholders.
In the Financial Times on 2 March, the City analysis column Lombard commented on the success of the campaign in rousing the private shareholders to vote, stating: 'The lesson of the bid's outcome is that small investors, when clear what is at stake (and Charter obviously worked hard at this), can be stirred into very effective action.'
On 20 March, CET's board revealed the final details and timetable of reconstruction proposals and launched a prospectus for a new Charter Pan-European Trust.
Existing shareholders have the option to transfer their investment to the new entity or to get their cash back.
New investors are also being sought.
In the Daily Mail, Alex Brummer wrote that the case was a 'salutary lesson to the whole (investment trust) industry' (2 March), bemoaning the power of major players in the sector.