Shock new developments in Endeavour board war

The stoush between the Endeavour Group board, the Matheson family and Bill Wavish has escalated in the lead up to the company’s annual meeting on October 31.

Wavish recently announced he wishes to join the Endeavour Group board and believes he can contribute towards “turning it around” as a director.

Wavish was finance director at Woolworths when it bought Dan Murphy’s in 1998. During his time with Woolworths the bottle shop chain grew from six stores in Victoria to become an Australian liquor giant. He organised the formation of BWS and led the acquisition of Mathieson’s hotels business.

The Australian and the Australian Financial Review have been running stories thick and fast this week on the saga. Here are some of the highlights from The Australian …

Lawyers for pubs billionaire Mathieson are demanding a trove of internal Endeavour boardroom documents

“Lawyers acting for pubs billionaire Bruce Mathieson Senior are demanding from Endeavour Group access to all boardroom minutes, ASX correspondence, policies and documents from specific board committees and any other sensitive documents that can shed further light on director opposition to the election of Bill Wavish to the board.”

“They have accused those Endeavour directors opposed to Mr Wavish’s election run (this excludes Mr Mathieson Sr’s son who is a director) of possibly breaching section 181 of the Corporations Act to exercise their duties and discharge their obligations in good faith in the best interests of Endeavour and for a proper purpose. They also could have caused Endeavour to breach ASX listing rule 14.3 by, in substance, refusing to accept Mr Wavish’s nomination.”

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Endeavour director Bruce Mathieson Junior claims he was locked out of a crucial board meeting

“The corporate battle around liquor and pubs giant Endeavour Group has ramped up with director Bruce Mathieson Junior claiming he was locked out of a crucial board meeting, making the gathering “unlawfully convened”.

“Mr Mathieson Jr also remained concerned about the poor performance of Endeavour, which owns Dan Murphy’s, BWS, wineries and 354 pubs, and will continue to lobby other directors and chief executive Steve Donohue his view on how to improve its businesses.”

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Peter Hearl rallies support and lashes out at rebel investors

“Endeavour Group, the under-siege owner of Dan Murphy’s and the nation’s largest pubs portfolio, has struck back against a relenting onslaught from its biggest shareholder, the Mathieson family, and rebel director candidate Bill Wavish, taking its case directly to its 420,000 shareholders to back the board at the upcoming AGM.

“It has urged its shareholders to vote against Mr Wavish, the former Woolworths supermarkets and liquor boss at the AGM slated for October 31 as the fighting between the company and its largest shareholder intensifies.

Mr Mathieson Sr also denied that he had plans to break up the company.

“I don’t. I want it run properly and for the share price to go from $5 to $10-plus. I’m never selling my Endeavour shares. These are for my family for generations to come. I’ve put that in my will.”

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Wavish turns on charm offensive amid battle for Endeavour seat

“Former supermarket boss Bill Wavish, who is seeking a seat on the board of Endeavour Group, has accused the pub and retail giant of a “complete absence of operating cost discipline,” excessive debt and “confusing branding.”

“The broadside is contained in an investor presentation seen by The Australian that Mr Wavish will present to key investors amid a “proxy war” to obtain the seat, a campaign backed by billionaire pub baron Bruce Mathieson.

“Endeavour shares are down almost 24 per cent over the past year with Mr Wavish noting retail sales are trading backwards with revenue per store plummeting.”

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The headlines at the Australian Financial Review include …

Endeavour Group CEO rallies staff

“Endeavour chief executive Steve Donohue, who has thus far refrained from publicly commenting on the hostilities, on Wednesday urged the group’s 30,000 staff in an internal email to not be distracted by the board stoush. Mr Donohue said he wanted to “correct some of the selective and incomplete” information being aired by the elder Mr Mathieson.”

“With our peak trade period ahead of us, now is the time to stay focused on supporting each other to deliver experiences our locals love,” Mr Donohue said.

In his internal email, Mr Donohue told his staff, many of whom are shareholders, to carefully consider communications from Endeavour chairman Peter Hearl, which rejected Mr Mathieson’s criticisms.

Mr Donohue also acknowledged that Endeavour faced a “rigorous regulatory landscape” and that the company was on the front foot as regulators toughened their stance on gaming machines. Endeavour is the biggest poker machine operator in the nation.

“There is volatility in our share price, and we have talked about the range of opportunities and our roles in addressing the market’s confidence in our great business,” he said.

“We do face a rigorous regulatory landscape, and we are still normalising capital costs and facing changing economic conditions. An enormous amount of work is ongoing to support our responsibility initiatives and adapt our business plans to meet the evolving market.”

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Endeavour accuses pubs billionaire of using ‘selective’ information

“The chairman of pubs and liquor retailing giant Endeavour Group has hit back at 15 per cent shareholder Bruce Mathieson’s torrent of criticism, telling Endeavour’s 420,000 shareholders to be ‘wary of selective and incomplete information’.

He does, however, accept that the company needs to lift its performance at a time of regulatory uncertainty in the gaming industry and as the cost of capital increases after sharp rises in interest rates.

“We have achieved strong performance through our first two years as a listed company, but we know there is more to do,” he wrote.

AFR also wrote: “Angus Aitken has lobbed a grenade into the stoush, telling his billionaire family and fund manager clients that Endeavour has gone from one of the best entrepreneur private businesses in the land to a “bloated and complex business that needs to be simplified to be fixed”.

​”He likened the company to Bunnings and Chemist Warehouse – two powerhouses in the retailing space – but warned Endeavour is under-earning. He suggested a first move would be to sell the Pinnacle Drinks division to repay debt, saying owning wineries is “madness”.

“A path to $8 to $10 a share in three years would need a new team, he said.

“If the current board and management team stay, the stock is going nowhere,” he said in his note.

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Bill Wavish outlines his Endeavour fix-it plan to investors

“Bill Wavish has outlined his “fix-it” plan to shareholders for getting Endeavour Group back on track and recovering some of the $5.6 billion of market value lost by the pubs and liquor business over the past year to “pet projects” and diminished confidence in its strategy.

“The former chairman of Myer and Dick Smith set out his agenda in a 22-page slide deck sent to fund managers on Monday. It proposed a two-phased strategy beginning with a review of the Dan Murphy’s chain, which would be led by the board, in tandem with a probe of the financial accounts, including a focus on costs, staffing and rostering.

“Phase two entails drafting a plan for the business’s 354 hotels; a review of Pinnacle Drinks; the wineries strategy; and a plan for the BWS liquor chain, according to the presentation.”

AFR also noted: “Some fund managers believe that Endeavour is taking quality cash flows from its liquor business and ploughing the money into higher-risk hotels and the capital-intensive wine businesses. They also think the group’s strategy needs to be better communicated.”

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