In the last month of the financial year there were 5 new actions and further developments on several campaigns which have been in play now for several months.
SurfStitch Group received a section 249D notice on 6 June for the requisition of a shareholders’ meeting from Crown Financial Pty Limited (Crown Financial), a shareholder which is currently engaged in litigation against entities in the SRF group. The notice is seeking the removal of the Chairman, Sam Weiss, as a director of the company.
SurfStitch announced on 27 June it has scheduled an EGM for August 2 to vote on the proposed resolutions from Crown Financial.
Ardent Leisure receives notice on 14 June of a general meeting from Ariadne which includes proposals to remove any director appointed since notice of the general meeting was given and to appoint Gary Weiss, Kevin Seymour, Carl Richmond and Andrew Hedges to the board of directors. Thorney Opportunities announces that it supports Ariadne’s proposed changes.
MEC Resources received another notice for the requisition of a shareholders’ meeting from dissident shareholder, David Breeze, in a campaign that is now entering its sixth month. David Breeze is seeking to replace four incumbent directors with his two nominees.
MEC, which has been fighting with the 12.7% shareholder since January, said it will take actions to prevent Breeze from convening the meeting, noting that the same proposals had already been rejected by shareholders. Thomas Fontaine and Anthony Huston, the directors proposed by Breeze, received 57% of the votes against their appointment to the board at the shareholder meeting in February.
In retaliation, MEC had initiated a proxy fight against Breeze’s BPH Energy, in an effort to unseat him and three other directors. At the annual meeting in April, Breeze and his candidates emerged victorious with over 85% of shares in favor of their re-election.
Molopo won its battle to prevent shareholders, Keybridge Capital and Aurora Funds from seizing control of the board. Following the Takeovers Panel’s declaration of “unacceptable circumstances” it made orders that certain shares held by Keybridge and Aurora in Molopo be sold and that those shares could not be voted at the AGM.
Shareholders voted against the shareholder proposals to remove company directors and the appointment of new directors at the company’s AGM on June 20.
Aurora Funds Management sought a review of the panel’s decision to order Keybridge and Aurora to sell a portion of their shares in Molopo and Molopo sought a review of the original decision that there was no “association” between Keybridge and Aurora. On 3 July the Panel found that an “association” did in fact exist and confirmed that the 22.49% holding acquired by Keybridge and Aurora since 26 October 2016 must be divested.
Reffind Limited received a notice on 29 June for the requisition of a shareholders’ meeting from Sterling Wealth Group seeking to replace co-founder and non-executive director Ben McGrath with Tim Shaw, the activist’s managing director. In March, another dissident shareholder, Chapmans, requisitioned a meeting with the same goal of replacing McGrath, but just two months later withdrew its request.
Asia Pacific Data Centre Group is being targeted by activist, 360 Capital, which has sent a notice of meeting and explanatory memorandum to APDC securityholders and called for a meeting to be held on 28 July 2017. APDC’s board has instructed shareholders to take no action until it has put a formal response to 360 Capital’s proposal.
If APDC securityholders decided to approve the 360 Capital Proposal, it would result in a change in management from a responsible entity which is owned by the securityholders and has an independent board, to 360 Capital FM Limited. 360 Capital currently holds less than 20% of APDC securities.
Leigh Creek Energy directors declined to call a meeting requisitioned by concerned shareholders including former MD, David Shearwood, to oust Executive Chairman Andrew Harrington. This was the second time in two months that such a Notice had been rejected on the basis that it was defective and did not comply with Section 249D of the Corporations Act.
Central Petroleum failed to receive the necessary support from its shareholders for a deal with Macquarie Group. While around 67% of Central Petroleum shares were voted in favor of the combination, it fell short of the 75% threshold needed for the transaction to go through. Shares in the company fell more than 20%, as investors anticipated a dilutive rights issue will be necessary for the company to be able to continue the development of its gas fields in the Northern Territory.
Although a group of dissidents succeeded in overthrowing the proposed combination, it is not certain that shareholders will back a board spill at the special meeting convened for July 19. OptionCo, the activist group led by Stuart Howes, wants to unseat all directors with the exception of CEO Richard Cottee, a well-regarded executive.
Martin Aircraft’s shareholders have approved a bylaw amendment relating to directors’ residence, paving the way for its majority Chinese investor, KuangChi Science, to take over the board.
The amendment, requiring New Zealand based Martin to have just one director resident in New Zealand, instead of a majority under the previous regime, was approved by 87% of the shares. KuangChi owns 52% of the stock.
A majority of Martin’s board members are currently based in New Zealand, but their roles are threatened by KuangChi, which now may handpick its own candidates. The company’s board is currently composed of five members.
Did you know that over the past year, 12 companies in the financial sector have been subject to public demands, on some occasions multiple times. This is similar to the number of companies targeted in the previous year.