FIRST Advisers has been fairly vocal for the past two years about the rise of activism in Australia and in particular the risk of offshore activists moving into this market given its ‘activist friendly’ regulatory environment. Because we frequently act for one of the parties in an activist campaign, we are closer than most to what is happening in this space and monitor it daily. It would probably surprise many in the market to know that during May there were around half a dozen campaigns on foot. This segment will keep you updated each month on live activist campaigns and short attacks in Australia – who the players are, what the campaign is seeking to achieve and the outcome. We’d love to hear your feedback over coming months …
Praemium’s activist shareholders succeed in replacing members of its Board and re-appoint Michael Ohanessian as its CEO. The activist shareholders included institutional investors Australian Ethical Investments, Paradice Investment Management and the Abercombie Group.
Elliott Management Corporation, one the world’s largest activist hedge funds, announced it will support a current director of BHP as its next Chairman despite reservations about its top management. It also called for BHP to spin off its US oil business.
1-Page shareholders voted for the removal of Joanna Riley as a director of the company. Shareholders did not support her own bid to remove the incumbent directors or the appointment of her proposed directors.
Sandon Capital and Ron Brierley’s Mercantile Investments requisitioned Fleetwood Corporation for a General Meeting to put forward proposals to change the company’s Constitution, including its dividend policy.
Central Petroleum received a requisition for a General Meeting by ten of its shareholders seeking to replace three of four directors on the Board and opposing the company’s acquisition by Macquarie Group. The dissident shareholders have indicated that they have secured the backing of 25% of the register to vote against the acquisition of Central Petroleum which needs to be endorsed by 75% of shares on issue. Central Petroleum’s CEO, Richard Cottee has threatened to resign if the dissident shareholders takeover the board.
Bellamy’s finally announced its new Board, appointing activist investor Janchor Partner’s John Ho as Chairman and appointing John Murphy as its third independent non-executive director. Murphy joins Chan Wai-Chan and Rodd Peters who were both appointed to the Board following Black Prince Foundation’s successful campaign in February to achieve Board renewal.
Shareholders of Spark Infrastructure voted against appointing dissident shareholder, James Dunphy, to the Board. This was Dunphy’s second attempt, having mounted a vocal campaign against the Board in 2016.
Molopo continues its battle to prevent shareholders, Keybridge Capital and Aurora Funds from seizing control of the Board. ASIC and the Takeovers Panel agreed to its request to postpone its AGM until June 20. The Takeovers Panel ruled on 31 May that while Keybridge and Aurora could not be said to be acting in concert, some of their actions gave rise to ‘unacceptable circumstances’. The ruling is not final and both Molopo and Keybridge are requesting a review.
FIRST Advisers has acted, or is continuing to act for, one of the parties in the Praemium, 1-page, Bellamys and Molopo campaigns.
Viceroy Research published a short report on Quintis, accusing it of questionable accounting practices. This is Viceroy’s second short attack in Australia, following its report on Syrah Resources published in January 2017. This month Syrah’s CEO fought back, asking regulators whether short sellers could be held responsible for the accuracy of their statements (answer – No). Syrah’s stock is down 13% since the beginning of the year.
Glaucus Research, which published the first short report on Quintis in March saying it was raising capital to pay off debt and had a “Ponzi-like” structure, said it continues to look for ‘rotten apples’ in Australia. Quintis stock has fallen 80% since Glaucus released its report.