The tense stand-off between Alliance Trust and Elliott Advisors finally erupted into a full-blown war of words on Friday, as the investment trust warned of a potential threat to its “very existence”, drawing a quick and sharp response from the activist hedge fund, which branded the trust’s board “out of touch” with shareholders.

The UK affiliate of US activist hedge fund Elliott Management, which has accumulated a 12% stake in Alliance Trust, nominated three independent non-executive directors ahead of Alliance Trust's annual meeting on April 29. But on Friday morning Alliance Trust's board unanimously rejected the proposed appointees and recommended that shareholders vote against them.