The annual meeting of shareholders for Endeavour, a prominent liquor retailer, is poised to be a tumultuous affair as shareholders prepare to cast their votes on executive remuneration. While a protest vote against the company’s executive pay packages is expected, a separate agenda, pushed by Bruce Mathieson, the billionaire publican and largest investor in Endeavour, to elect Bill Wavish to the board, appears to have hit a roadblock.
A Complex Battle Unfolds
Norges Bank Investment Management, a significant player in the investment arena as a Norwegian sovereign wealth fund, has chosen to vote against Bill Wavish’s election to the board. Instead, they have voiced their support for the remuneration report, echoing the board’s recommendations. Adding to this stance is Woolworths, another major shareholder in Endeavour, which has signalled its intention to align with the board’s recommendations.
The complex scenario surrounding the election of Bill Wavish doesn’t end there. Influential proxy advisory groups, including Institutional Shareholder Services, CGI Glass Lewis, and Ownership Matters, have all issued recommendations for shareholders to vote against Wavish’s election. Even the Australian Council of Superannuation Investors has expressed its disapproval of Wavish’s appointment.
Bruce Mathieson’s Push for Change
Bruce Mathieson, who controls a significant 15.1% stake in Endeavour, has been at the forefront of this push to reshape the company’s board. Mathieson has waged a persistent campaign against Endeavour, which he perceives as a subpar performer within the industry. His rallying cry has been in favour of Bill Wavish, a former Woolworth’s executive, to be elected as a director.
However, as the votes are tallied ahead of the upcoming shareholder meeting, it appears that the requisite 25% vote needed to register a strike against the company’s remuneration report will be achieved. This, in itself, is a significant development as it signifies the shareholders’ dissatisfaction with the current state of affairs at Endeavour.
Issues at the Heart of the Matter
Endeavour was separated from the supermarket giant in 2021 and subsequently listed on the Australian Securities Exchange (ASX). Since this move, the company’s share price has experienced a noticeable decline, leading to the frustration of both Bill Wavish and Bruce Mathieson. Their primary contention centres around what they perceive as a flawed strategy being pursued at Dan Murphy’s, one of the nation’s largest liquor retail chains.
Mathieson has taken a vocal stance against the company’s Chairman, Peter Hearl, whom he believes has lost credibility in the market. In Mathieson’s view, competitors Australian Venue Co. and Coles are outperforming Endeavour, raising further concerns about the company’s strategy and performance.
Endeavour’s recent acquisitions, including Cape Mentelle in Western Australia and Shingleback Wines in South Australia’s McLaren Vale, have also come under fire from Mathieson. He argues that these are low-returning wineries and that the introduction of smaller Dan Murphy’s stores has failed to generate the expected value. In his eyes, the company’s share price is in a downward spiral, and he says chief executive, Steve Donohue, is overseeing a “flawed strategy.”
The battle for the future of Endeavour, spurred by Bruce Mathieson’s advocacy for Bill Wavish’s election to the board, has encountered resistance from key stakeholders. As the dust settles following the annual meeting of shareholders, the company’s direction remains uncertain. The outcome of this clash of interests will significantly impact the trajectory of one of Australia’s prominent liquor retailers, making it a saga worth monitoring closely in the coming months.
