Landslide approval for Endeavour Group demerger

Woolworths shareholders have voted overwhelmingly in favour of the demerger of the Endeavour Group. At a meeting on Friday, 99.85% of the votes cast were in favour of the demerger.

The demerger already had strong backing in proxy votes lodged before the meeting, with 98.6% in favour and 0.15% against. Open proxies totalled 1.27%.

Chairman Gordon Cairns said: “As a separately listed entity, Endeavour Group will have a broad mandate for growth. It will be able to pursue its business strategy with flexibility to invest in its best returning opportunities and respond to changing consumer behaviours and industry conditions.

“It does so with market leading positions in both the retail and hospitality sectors. It will be led by Steve Donohue as CEO, and an experienced management team who have especially proven themselves over the last 12 months. We have also put together a first-class board, with the appropriate skills and experience, led by Peter Hearl as Chairman-elect. I have known Peter for many years. He is a proven leader and an experienced public company director currently serving on the boards of Santos and

“And finally, Holly Kramer and Bruce Mathieson Sr have been nominated by Woolworths Group and Bruce Mathieson Group respectively, to serve on the Endeavour Group board, reflecting both groups’ material shareholding post demerger.”

Speculation Mathieson will sell out

Woolworths will retain a 14.6% stake in Endeavour Group, while long-term joint venture partner Bruce Mathieson Group will also hold a 14.6% stake.

However, The Australian has speculated that billionaire Bruce Mathieson is “no fan of the spotlight that comes with being involved in listed companies” and may consider pulling out of Endeavour, as demerger documents released a couple of months ago show that neither Mathieson or Woolworths have to “hang around for long”.

“When the Demerger is implemented, Woolworths’ and BMG’s (Bruce Mathieson Group’s) shareholdings in Endeavour will not be subject to any escrow or to any retention arrangements,” the group’s demerger booklet reveals.

The Australian adds: “Mathieson is famous for sniffing out value in a deal and making his money ‘on the way in’ as he likes to say, by picking up assets at decent value at the start and later selling at the top of a market.”

The 360,000 Woolworths shareholders will receive one share in Endeavour for every Woolworths share they own. Woolworths plans to return between $1.6 billion and $2 billion to shareholders after the demerger. 

Endeavour Group posted $10.6 billion in sales and $693 million in earnings before interest and tax in the 2020 financial year.

Endeavour shares will commence trading on the ASX on June 24, with the demerger implementation date set for July 1.

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Categories: Business