Alliance Trust PLC — Proxy Solicitation & Information Statement 2012

Apr 3, 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, please seek advice immediately from an independent financial adviser authorised under the Financial Services and Markets Act 2000.

☎ HELPLINE 0800 923 1525

www.alliancetrust.co.uk/agm2012

Notice of a requisitioned resolution at the Annual General Meeting

YOUR VOTE IS IMPORTANT - PLEASE VOTE

Dear Shareholder,

Your Company has been requisitioned by Laxey, an offshore-registered hedge fund manager, to put a resolution to the forthcoming AGM. Regrettably, Laxey has chosen to put your Company to the expense of re-proposing a matter, the substance of which shareholders overwhelmingly rejected at last year's AGM. The combined costs relating to this and the previous requisition will be in excess of £2.5 million.

Your Board manages the Company in the long-term interests of all shareholders. By contrast, Laxey has made it clear, through the substance of its resolution, that it is motivated by its own short-term self-interest.

Laxey's proposal will not benefit shareholders over the medium and long-term

• At last year's AGM, shareholders convincingly rejected Laxey's suggestion that the Board should introduce a rigid discount control mechanism. Laxey's latest proposal would have a similarly detrimental effect for shareholders in the long-term.

Your Board is committed to narrowing the discount on a sustainable basis

• We aim to deliver this through a combination of improving investment performance, an ongoing programme of share buybacks and a continuing emphasis on sustainable dividend growth.

Your Company is delivering strong investment performance at low cost

• Last year, the Company generated a total shareholder return which outperformed the Sector by 5%, a top quartile performance, and on an NAV total return basis outperformed its Sector by over 2%. This has been achieved alongside a reduction in the absolute discount and volatility of the discount and a 7% increase to the dividend.
• Laxey suggest that the Board should consider outsourcing the investment management as a way to lower the cost of managing the Company. However, even after including the costs relating to last year's requisition by Laxey, the annualised TER of 0.65% ranks Alliance Trust among the lowest cost trusts in the Sector.

The Board cannot support actions that might be convenient to a small minority of shareholders but are to the detriment of the Company as a whole. We therefore urge all shareholders to vote once again this year to ensure that the result reflects the interests of the majority.

Please read and consider the entirety of this Circular before voting.

Your Board recommends that shareholders VOTE AGAINST the Laxey Resolution, as they intend to do with their own shares.

I look forward to seeing many of you at the forthcoming AGM.

Yours sincerely

Karin Forseke Chairman

TIMETABLE FOR AGM
11.00 a.m. on 23 April 2012
11.00 a.m. on 25 April 2012
11.00 a.m. on 27 April 2012

You will find enclosed a blue Form of Proxy or a Form of Direction for use in connection with the Laxey Resolution. To be valid, the Form of Proxy or Form of Direction must be completed and returned in accordance with the instructions thereon so as to be received at the offices of the Company's registrars, Computershare, The Pavilions, Bridgewater Road, Bristol BS99 6ZY, as soon as possible and in any event by not later than 11.00 a.m. on 25 April 2012 (in the case of a Form of Proxy) or 11.00 a.m. on 23 April 2012 (in the case of a Form of Direction).

Please note that the enclosed blue Form of Proxy and Form of Direction is only for the Laxey Resolution. You will need to complete another Form of Proxy and Form of Direction (a white form, which was sent to you along with the Annual Report or Annual Review and AGM notice) for the other resolutions to be proposed at the AGM.

If you wish to support your Board please vote by completing the enclosed form in the following way:

If you have sold or otherwise transferred all of your shares, please send this Circular, together with the accompanying documents, at once to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.

In relation to the proposals described in this Circular, J.P. Morgan Cazenove and Numis, which are regulated by the Financial Services Authority, are acting for the Company and no one else and will not be responsible to any other person for providing the protections afforded to customers of J.P. Morgan Cazenove or Numis or for providing advice in relation to such proposals.

Each of J.P. Morgan Cazenove and Numis has given and not withdrawn its consent to the inclusion in this Circular of the references to its name in the form and context in which it is included.

PART I – LETTER FROM THE CHAIRMAN

ALLIANCE TRUST PLC

(Incorporated and registered in Scotland under the Companies Acts, No.1731)

Karin Forseke (Chairman) 8 West Marketgait Hugh Bolland Dundee Consuelo Brooke DD1 1QN Katherine Garrett-Cox John Hylands Tim Ingram Christopher Masters Alan Trotter

Directors Registered Office

3 April 2012

Dear Shareholder,

Introduction

The purpose of this Circular is to notify you of an additional resolution that has been requisitioned for the forthcoming Annual General Meeting ("AGM") and explain what your Board recommends you do in relation to this resolution.

LPL UK 1 Ltd and 100 other companies (LPL UK 2 Ltd to LPL UK 100 Ltd and LACV Ltd), all of which are associated with Laxey Partners Limited, an Isle of Man registered hedge fund manager ("Laxey"), and together hold a total of 404,000 shares or 0.07% of your Company, have requisitioned an additional resolution, as permitted by the Companies Act 2006, at the AGM of your Company which will be held at the Apex City Quay Hotel, 1 West Victoria Dock Road, Dundee DD1 3JP, on 27 April 2012, commencing at 11.00 a.m.

Shareholders should already have received notice of the AGM which was published along with the Annual Report on 12 March 2012. Laxey chose to submit their requisition on that date meaning that it has been necessary to prepare this Circular separately resulting in additional cost to shareholders and the Company. The requisition notice requires the Board to put to the AGM the following resolution (the "Laxey Resolution"):

"THAT the Directors shall, as soon as practicable following the passing of this resolution, conduct a comprehensive review of the Company to determine what steps can be taken to improve the management of the Company's affairs (in terms of addressing the investment performance of the Company and the discount at which the Company's ordinary shares trade to their net asset value). This review should include the possibility of externalising the investment management of the Company's portfolio and should also bring forward proposals which would enable shareholders who wish to sell their ordinary shares, to do so at a price which more closely reflects net asset value."

The Board recommends shareholders to VOTE AGAINST the Laxey Resolution.

Background

Shareholders will recall that Laxey requisitioned two resolutions at last year's AGM, one of which sought to impose a rigid discount control mechanism on your Company (such that short-term shareholders could sell their shares at a narrower discount to net asset value than the price at which they had bought) at a cost of impaired investment flexibility and an increased TER for long-term shareholders. Laxey appears to be seeking, in essence, the same short-term exit this year, in calling for the Board to bring forward proposals to enable shareholders who wish to do so to exit at a price closer to net asset value.

This repetitive requisitioning appears to be motivated by Laxey's own short-term self-interest and is very expensive to your Company. As a consequence of last year's requisition and this new Laxey Resolution, the Company will have incurred advisory, legal, printing, registrar and UK Listing Authority and other costs in excess of £2.5 million. These costs are payable by your Company whether or not the Laxey Resolution becomes effective.

The Laxey Resolution and the Board's response

The first part of the Laxey Resolution seeks to require the Board to

"conduct a comprehensive review of the Company to determine what steps can be taken to improve the management of the Company's affairs (in terms of addressing the investment performance of the Company and the discount at which the Company's ordinary shares trade to their net asset value). This review should include the possibility of externalising the investment management of the Company's portfolio"

As you would expect, the Board of your Company continuously assesses and evaluates investment performance and the Company's structure in the best interests of shareholders.

Shareholders can be assured that the Board has considered and will continue to consider the appropriateness of the current internalised investment management of its assets. As such, this proposal represents an unnecessary and expensive repetition of an essential and regular component of your Board's business.

Performance and Discount Improvements

Improving investment performance remains a priority and the Board is pleased to report that much has been achieved in the last year:

Improved performance:

• • The performance of the Company has improved significantly since last year's AGM. Over the 12 months to 28 March 2012 your Company has outperformed the Sector by 2.4%, whereas at the time of the AGM it had underperformed; and
• • Between July 2010, when your Board became aware of Laxey's position in the Company, and 28 March 2012, the NAV total return and TSR are 17.1% and 21.9% respectively, both of which outperform the Sector average.

This improvement has been achieved as a result of a strengthening of the investment process, recruitment of additional high-calibre investment personnel and good progress by the subsidiaries. The Board believes that the improvement is increasingly being recognised by current and potential investors.

Discount tightening:

Since the Company's decision to implement a more active share buyback policy, the discount has narrowed materially and stabilised. Indeed, the volatility of the discount during the period since last year's AGM is less than half of the volatility during the equivalent period before last year's AGM, at a time when discount volatility elsewhere in the Sector has increased. In addition, since the date of the Company's first share buyback (in October 2009), the discount has narrowed from 18.9% to 15.8%. Accordingly, the Company will continue with its share buyback programme.

Dividend increase:

Your Board increased the dividend for the period ended 31 December 2011 by 7.2% - our 45th consecutive dividend increase and our highest increase in regular dividends in 20 years. The Directors recognise the importance to shareholders of a reliable and steadily increasing source of income and intend to continue our emphasis on sustainable dividend growth.

Key Benefits of the Internalised Structure

Laxey has proposed that the Board should investigate the possibility of "externalising the investment management" on the basis that such a move would result in "excessive costs being removed". However, the suggestion that "excessive costs" exist to be removed from the TER of your Company, is not supported by the evidence.

The annualised TER of the Company to 31 December 2011 was 0.65%. The asset weighted average TER for the Sector, based on the most recently published results of its constituents, was 0.97%. If the self-managed trusts are removed from this calculation, the average TER for the Sector rises to 1.04%, whereas for the self-managed trusts the average TER is 0.78% - in other words, lower than that of their externally managed peers. In contrast to Laxey's suggestions of excess cost, the evidence demonstrates that your Company is one of the lowest cost companies in the Sector when compared to both internally and externally managed peers.

Whilst your Board remains open-minded to the merits of other structures, it has conviction in the focus and flexibility which internal management brings to your Company, in addition to the prospect of building a valuable third party asset management business over time. As shown above, investment costs are lower through our internal management structure than by external management of the Company's assets.

The second part of the Laxey Resolution requests that proposals be brought forward to enable shareholders to sell closer to NAV.

The latter part of the Laxey Resolution seeks to achieve essentially the same outcome that was intended by one of the requisitioned resolutions put by Laxey to the AGM last year. The Board continues to believe, as it did last year, that the structural mechanisms implied by such a resolution are not in the interests of long-term shareholders as they typically deliver one-off benefits that favour shareholders looking to exit rather than those looking to support long-term value generation.

The Board believes that the interests of long-term shareholders are best served by increasing demand for the Company's shares coupled with a sustainable strategy to manage supply. In that context:

• • The key drivers of investor demand are investment performance and prospective dividend distributions. The Board continually reviews all options available to it with a view to enhancing the attractiveness of the investment proposition. As noted above, recent investment performance has been stronger and the Board aims to continue its long record of progressive dividend distributions.
• • Supply of your Company's shares in the market continues to be managed through an active share buyback programme. Over the last 12 months, the Company has invested almost £275 million in share buybacks, which has materially reduced discount volatility in the Company's shares. As noted above, the volatility of the discount has been halved and the discount itself has narrowed.

At the AGM last year shareholders voted convincingly against a similar proposal and the Board once again urges all shareholders to vote against the current Laxey Resolution.

Finally, your Board has been advised that the Laxey Resolution is, at least in part, likely to be ineffective as the requirement to bring forward proposals would not be binding on the Board under the Company's constitution.

Your Board believes that the Laxey Resolution is not in the best interests of the Company and shareholders as a whole and strongly recommends shareholders to VOTE AGAINST the Laxey Resolution.

AGM

Set out at the end of this document is a notice proposing the Laxey Resolution as an additional resolution at the AGM to be held at the Apex City Quay Hotel, 1 West Victoria Dock Road, Dundee DD1 3JP, on 27 April 2012, commencing at 11.00 a.m.

Action to be taken

YOUR VOTE IS IMPORTANT - PLEASE VOTE

(a) Shareholders

Shareholders will find enclosed with this Circular a blue Form of Proxy for use in connection with the Laxey Resolution. Whether or not you intend to be present at the AGM, you are encouraged to complete the Form of Proxy in accordance with the instructions printed thereon and return it to the Company's registrars, Computershare, as soon as possible but, in any event, so as to arrive by no later than 11.00 a.m. on 25 April 2012. Completion and return of the Form of Proxy will not preclude you from attending and voting in person at the AGM, should you so wish.

Please note that enclosed blue Form of Proxy is only for the Laxey Resolution. You will need to complete another Form of Proxy (a white form, which was sent to you along with the Annual Report or Annual Review and AGM notice) for the other resolutions to be proposed at the AGM.

(b) Alliance Trust Savings customers

If you hold your Alliance Trust PLC shares through an Alliance Trust Savings plan, you will find enclosed with this Circular a blue Form of Direction for use in connection with the Laxey Resolution. Whether or not you intend to be present at the AGM, you are encouraged to complete the Form of Direction in accordance with the instructions printed thereon and return it to your Company's registrars, Computershare, as soon as possible but, in any event, so as to arrive by no later than 11.00 a.m. on 23 April 2012. Completion and return of the Form of Direction will not preclude you from attending the AGM, should you so wish.

Please note that the enclosed blue Form of Direction is only for the Laxey Resolution. You will need to complete another Form of Direction (a white form, which was sent to you along with the Annual Report or Annual Review and AGM notice) for the other resolutions to be proposed at the AGM.

Helpline

If shareholders have any queries in respect of the issues raised in this Circular, a helpline is available on 0800 923 1525.

The operators of the helpline are unable to give financial advice.

Recommendation

Your Board considers that Resolution 13 (the Laxey Resolution) to be proposed at the AGM is NOT in the best interests of the Company and the shareholders as a whole.

Accordingly, your Board unanimously recommends you to VOTE AGAINST Resolution 13 to be proposed at the AGM as they intend to do in respect of their own beneficial holdings representing 0.1% of the shares in the Company.

The Board has received financial advice from J.P. Morgan Cazenove and Numis in relation to Resolution 13. In giving their advice, J.P. Morgan Cazenove and Numis have taken into account the commercial assessments of the Directors.

Yours sincerely

Karin Forseke Chairman

PART II – STATEMENT BY LAXEY

Your Company is required under section 314 of the Companies Act 2006 to distribute to shareholders this statement by Laxey Partners Limited. It does not represent the views of the Board.

12 March 2012 – Statement

Dear fellow Shareholder

We are writing to you in connection with Alliance Trust plc ("Alliance"). Funds managed by Laxey Partners Limited hold 9,965,079 shares in Alliance totalling £37,289,326 at the closing market price on the 9th March 2012. We therefore wish to see Alliance perform to its fullest potential.

You will be aware that last year we put forward two resolutions to the 2011 AGM. Nearly a year has passed and we feel obliged to put forward a further resolution to be considered at the forthcoming AGM:

"THAT the Directors shall, as soon as practicable following the passing of this resolution, conduct a comprehensive review of the Company to determine what steps can be taken to improve the management of the Company's affairs (in terms of addressing the investment performance of the Company and the discount at which the Company's ordinary shares trade to their net asset value). This review should include the possibility of externalising the investment management of the Company's portfolio and should also bring forward proposals which would enable shareholders who wish to sell their ordinary shares, to do so at a price which more closely reflects net asset value."

Why have we done this?

Performance

As a long term shareholder, we have seen the NAV total return performance of Alliance disappoint again and again. Using the FTSE All-World Index to 31/12/2011 (which Alliance has chosen as a comparator), Alliance has underperformed over 1, 2, 3, 4 and 5 years which we consider completely unacceptable.

Alliance, for the first time this year, has also provided portfolio attribution analysis. Worryingly, we note that in the Financial Year to 31/12/2011, the stock selection over the discretionary investment portfolio was minus 0.3% when compared to the same index. The overall NAV total return (after stripping out the effect of the buyback) also underperformed the index by 1.5%.

Discount

By not heeding our suggested discount control mechanism (DCM) at the last AGM – which was specifically tailored to limit discount volatility in addition to absolute level – Alliance has adopted an ill-defined policy to limit the discount. Given that shareholders have been unable to quantify that policy, they have been selling Alliance's shares at a rapid rate as it is not possible to know at what level the buyback will be operating tomorrow – let alone next year. In the year to 31/12/2011, 10.3% of Alliance has been bought in for cancellation and yet the discount has widened from 14.3% at the introduction of the flexible buyback policy at the 2011 AGM to 15% over the financial year. Tellingly, this ranks 26 out of 28 trusts within the AIC Global Growth Sector over the comparable period. Furthermore, the statement in the results to 31/12/11 that "we would not expect to maintain this level of buyback activity in normal market conditions" can only increase uncertainty, volatility and absolute level.

Internal Management

Alliance is internally managed. That means that it does not have a management contract as such, but directly employs (within the group) fund managers, administrators and other staff. We believe the company TER ignores the cash drag from the two loss making subsidiaries – Alliance Trust Savings and Alliance Trust Investments. We calculate accumulated losses from these subsidiaries at £30m and £14m respectively. By consolidating the two subsidiaries, we estimate that the TER is in fact 0.98% - 50% higher than the company TER. We think this is completely excessive when compared to 0.79% for the market cap weighted average TER for externally managed funds within the AIC Global Growth sector.

External Management

An external manager is typically rewarded via a management fee levied on a percentage of funds under management (or market capitalisation) and often a performance fee subject to outperformance of a clearly defined benchmark and further subject to a high watermark. The cost to the fund's shareholders is not fixed and in the event of a falling market does not become a millstone around the neck of shareholders. By allying the structuring of the management fee to the share price or assets of the company the problem of excessive costs is removed. We believe that a lower flat fee allied to a performance fee protects shareholders from excessive charging in falling markets and incentivises the manager to maximise the return to shareholders in all market conditions.

The Future

With the NAV performance of Alliance continuing to underperform (it would have been even worse unless enhanced by the 1.7% NAV uplift from the buyback in the period to December 2011) and the buyback mechanism being so ill-defined, we anticipate the buyback will need to be employed at a high level for some time to come if the discount is not going to widen further – which Alliance are now casting doubt over. Whilst this would enhance the NAV it will also increase the pressure on the fund's cost base. Carrying two loss making subsidiaries does not help in this regard and if the fund's assets shrink, the group TER will increase from an already very high 0.98%.

We believe that a comprehensive review should therefore focus on ensuring the very best in investment management and a more robust solution to the rating of the shares and should focus on the following points:

Is the internal management structure providing the best value for shareholders?

What additional steps should be taken to improve the performance?

How is the rating of Alliance going to be improved in both the short and long term?

Conclusion

As shareholders, we are not benefitting from the internal management structure. Poor performance, loss making subsidiaries, a high group expense ratio and a volatile, wide discount are symptomatic. We call on the Board to shoulder their responsibilities as independent directors and conduct a comprehensive review of the management of the Company's affairs. This should explore the possibility of externalising the management contract and determine appropriate actions to further enhance the performance and rating of Alliance to the benefit of all shareholders.

For more information please refer to: www.atstaction.co.uk

PART III – NOTICE OF ADDITIONAL RESOLUTION AT ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that at the 124th Annual General Meeting of Alliance Trust PLC which has been convened for Friday, 27 April 2012 at 11.00 a.m. at the Apex City Quay Hotel, 1 West Victoria Dock Road, Dundee, DD1 3JP, the following additional resolution 13 will be proposed as an Ordinary Resolution, as set out below:

ORDINARY RESOLUTION

13 THAT the Directors shall, as soon as practicable following the passing of this resolution, conduct a comprehensive review of the Company to determine what steps can be taken to improve the management of the Company's affairs (in terms of addressing the investment performance of the Company and the discount at which the Company's ordinary shares trade to their net asset value). This review should include the possibility of externalising the investment management of the Company's portfolio and should also bring forward proposals which would enable shareholders who wish to sell their ordinary shares, to do so at a price which more closely reflects net asset value.

Further information about the Annual General Meeting and shareholders' rights in relation to the Annual General Meeting are contained in the Notice of Annual General Meeting.

By order of the Board

Donald McPherson, Company Secretary Dundee, 3 April 2012

8 | Alliance Trust PLC Requisitioned Resolution 2012

PART IV – DEFINITIONS

The following definitions apply throughout this circular unless the context requires otherwise:

Annual Report	The annual report and accounts of your Company.
Board or Directors	The Directors of your Company.
Company or Alliance Trust	Alliance Trust PLC.
Computershare	Computershare Investor Services PLC.
Form of Direction	The forms of direction for use in connection with the Laxey Resolution or the Annual General Meeting, as the case may be.
Form of Proxy	The forms of proxy for use in connection with the Laxey Resolution or the Annual General Meeting, as the case may be.
J.P. Morgan Cazenove	J.P. Morgan Limited, a company which operates its investment banking business in the UK under the name J.P. Morgan Cazenove.
NAV	Net asset value: the value of the capital assets of your Company (excluding current period interest and dividend income) after deduction of all liabilities.
NAV Total Return	The total return generated by the fund, calculated as the percentage change in the NAV per share plus the effect of the value of the declared dividend per share paid out. The dividend is accounted for on the day that the stock is declared ex-dividend.
Numis	Numis Securities Limited.
Sector	AIC Global Growth Sector classification as published by Morningstar.
Total Expense Ratio or TER	The annual management and administrative expenses of the Company, divided by the average of the opening and closing net assets of the Company.
Total Shareholder Return or TSR	The total return due to a shareholder, calculated as the percentage change in the share price plus the effect of the value of the declared dividend per share being reinvested in the share price. The dividend is accounted for on the day that the stock is declared ex-dividend.