During August a number of long running campaigns came to an end and a few new additions emerged. We also saw Greencape Capital ‘out itself’ as an activist investor. Ardent Leisure and Ariadne reached a resolution in one of the most publicly contested and hard fought activist campaigns this year.
Ardent v Ariadne
Ardent released its recommendation on 14 August, advising shareholders to vote at the EGM against Ariadne’s Board nominees. Following feedback from shareholders, and a commitment by the company to appoint a US based director, Ariadne reduced its number of Board nominees from four to two.
Ardent had support from two independent corporate governance advisers, ISS and CGI Glass Lewis, as well as the Australian Shareholders Association, who recommended a vote against the Ariadne proposed directors. Ardent noted that the advisers reached their conclusion after discussions with both parties.
Known activist investor Thorney Investment Group, led by Alex Waislitz, supported Ariadne.
On Sunday 3 September, Ardent canceled the EGM and appointed Ariadne’s nominees, Dr. Gary Weiss and US-based executive Brad Richmond, to the Board.
BPS v Alceon Group & LHC Capital
Alceon and LHC have put forward resolutions to remove the entire Board and replace the directors with four of their own nominees. BPS is considering the notice and will comment ‘in due course’.
RNY Property v Aurora Funds Management
Known activist Aurora Funds Management has made a conditional takeover bid for RNY Property, offering A$0.015 per share for the Australian real estate trust.
RNY said the bid price was in the range of potential distributions it wants to make to shareholders and called on Aurora to submit an unconditional takeover bid by 1 September in order to eliminate the risk that it will not pay shareholders the proposed amount.
Aurora submitted a resolution for the upcoming AGM on September 12 to remove RNY Australia as the external manager, stating a lack of confidence in it overseeing the liquidation process.
Pacific Current v Advocate Partners
Pacific Current, formed by a joint venture between Treasury Group and Northern Lights, remains under attack by activist Advocate Partners, led by Michael de Tocqueville. Advocate has requested a number of confidential documents from Pacific Current in order to decide whether to bring claims against the company’s directors who it suspects failed to conduct appropriate due diligence when merging with Northern Lights.
Advocate claims shareholder value was destroyed.
EZA v Mercantile Investment
Mercantile Investment, founded by Sir Ron Brierley, has called for the liquidation of EZA, and is seemingly ready to bid for the shares. EZA has been suspended since December 2015.
EZA has announced a meeting will be held on 29 September to vote on wholesale changes and the wind up proposal put forward by Mercantile.
EZA is seeking to approve the acquisition of Challa – a gold and base metals business in WA, along with a capital raise to finance the buyout. Shareholders will also vote on changing the name of EZA to Santa Fe Minerals Ltd.
Asia Pacific Data Centre Group v 360 Capital
On 1 September, 360 Capital emerged with an offer for Asia Pacific Data Centre Group (APDC) of A1.95 per share, comprising a A$0.65 per share capital distribution, plus a cash consideration of A$1.30 per share.
APDC has rejected the proposed offer, saying it contains a series of execution risks and, as a result, continues to recommend its shareholders vote for the A$1.87 per share offer submitted by NextDC, which is scheduled to close on 15 September, unless extended.
BHP v Elliot Management
BHP has caved into pressure from shareholders Elliot Management and Tribeca to exit its US shale business. The sale of the US shale assets was among the activist’s requests along with removing its dual listing and large buybacks.
The day after it unveiled plans to exit its US shale business, BHP announced a number of Board changes. Grant King will step down at the end of August after just 6 months in his director role, along with Malcolm Brinded who will resign due to legal issues relating to his prior employment with Shell. The directors will be replaced by Terry Bowen and John Mogford.
Elliot had been pushing BHP to increase shareholder value, conducting a campaign, which included targeting smaller shareholders with a website and billboards. The investor has increased its stake from 4% to 5%.
Reffind v Stirling Wealth Group
Shareholders voted to remove Reffind’s co-founder and non-executive director Ben McGrath and replace him with the Managing Director of Stirling Wealth Group, Tim Shaw. Of the shares participating in the vote, 68% voted for the removal of McGrath.
Stirling Wealth holds over 9% of Reffind’s stock.
Greencape has outed itself as an activist investor, favouring the approach of behind-the-scenes engagement but is prepared to take a more aggressive stance when targets are unwilling to engage. Greencape was founded by former Merrill Lynch employees David Pace and Matthew Ryland.
David Pace said, “I would describe us as constructive activists – we are making strong suggestions to the CEO and the Board. If we are listened to, we continue to be constructive. If we aren’t, we get less constructive and more activist”.
Its most recent move was to suggest telecom operator Vocus Group appoint a new Board member.
Failed Activism – AWE v Mitch Dawney
An attempt by former stockbroker Mitch Dawney to acquire 20% of shares in AWE has failed.
Dawney, who owns 0.2% of stock, had launched his proposal without having the capital to pay for stock. He had asked shareholders to grant him options to acquire up to 20% of the stock, stating he could find a third party that would acquire the shares. The Offer period has now closed without sufficient shareholder uptake. Any options granted will now lapse.