The stoush at the heart of Endeavour Group’s impending Board election continues to rumble on with an exchange of letters between Bruce Mathieson Snr and the Chairman of Endeavour Group, Peter Hearl.
Earlier this week, The Shout reported that Mathieson was backing former Woolworths CFO Bill Wavish to be elected into one of the two Independent Non-Executive Director positions that will be voted on at Endeavour’s Annual General Meeting at the end of October.
In responding to Mathieson, Endeavour said that while Wavish’s nomination had been received he did not have the regulatory approvals to be eligible for election and that he had not engaged in the offer to be part of Endeavour’s formal director search process that was underway.
The to-and-fro has continued with Mathieson writing a letter to Hearl highlighting his concerns regarding Endeavour’s performance and threatening legal action over Wavish’s election.
The Australian reported that in his letter Mathieson said: “From what I have read in the notice of meeting for the upcoming AGM, you intend to deny shareholders the opportunity to vote on Bill’s appointment to the board if he has not obtained all necessary regulatory approvals at that time.
“This is preposterous as there is no realistic prospect that anyone could obtain all necessary regulatory approvals in such a short time frame.”
He added: “Endeavour’s suggestion that its policy with respect to Mr Wavish is one required by law will be robustly challenged. Especially because given your approach, I do not understand how a third party director candidate could reasonably expect to be elected to the board of Endeavour without your endorsement.
“Your position effectively denies Endeavour shareholders their legal right to determine the composition of their company‘s board.
“The Endeavour board should be focused on value creation rather than seeking to mount the barricades to entrench their own positions.”
In a letter obtained by The Shout, Hearl has responded to Mathieson’s claims and stands firm in his backing of both Endeavour’s performance and its procedures regarding Wavish’s potential election to the Board.
In regards to Endeavour’s performance, Hearl wrote: “On any reading of our business performance over the past four years, we have been the clear market leader in our categories and to suggest otherwise would demonstrate a fundamental misunderstanding of Endeavour Group’s results.
“It is disappointing that you are not providing a balanced or accurate view of the business in your correspondence with us or in your public commentary, which only serves to misinform shareholders and have a negative impact on the business to the detriment of all shareholders.”
Hearl went on to point out the results Endeavour has reported over the last four years including four per cent growth in its retail business and sales CAGR of 4.8 per cent for the hotels business over the same period.
Hearl wrote: “You have previously acknowledged in public commentary that regulatory concerns have negatively contributed to the current share price. In your correspondence and recent public commentary, it is disappointing given your previous position that you are now overlooking the impact of potential regulatory changes on the business and the share price. I can only assume you are not addressing this issue as it doesn’t suit your subjective narrative around the performance of the Board and management team.”
In regards to the election of Wavish, Hearl wrote: “I remain firmly of the view that the manner in which Mr Wavish’s nomination as a director is addressed in the Endeavour Group Limited Notice of Meeting is appropriate and correct.”
He went to address the Group’s constitution and the fact that Wavish has not engaged with the company since his nomination was received.
“The relevant terms of the Endeavour Group Limited constitution are unambiguous,” Hearl writes. “The requirement that the resolution be withdrawn should all necessary regulatory approvals not be received in time is not a tactic, as you suggest, but rather an action that complies with the requirements of the constitution.”
He added: “Your letter asserts that Endeavour’s approach has the consequence that a director candidate could not reasonably expect to be elected without Board endorsement. This is not the case.
“Upon receipt of Mr Wavish’s nomination, relevant Endeavour team members have made themselves available to assist Mr Wavish in obtaining regulatory approvals and this process is ongoing. The time at which this process commenced was within Mr Wavish’s control.
“Mr Wavish could have engaged with the company earlier to commence the regulatory approval processes and he could also have commenced the preparation required for the regulatory approval processes (eg obtaining all necessary background information) given these processes are publicly available.”
Before signing off, Hearl also addressed Mathieson remarks regarding Hearl’s performance as Chairman of Endeavour Group, saying: “I am well aware of my duties as director and assure you that I have always and will continue to always act in the best interest of Endeavour and all shareholders.”
The Shout will continue to monitor this process and bring you the latest news.