The shareholder meeting that felt like a pub brawl

Threats, abuse, condemnation and accusations. It might sound like a pub brawl, but it was a theatrical showdown between the shareholders and the board at the annual meeting of Endeavour – the biggest pub and bottle shop owner in the country.

It had everything but fisticuffs and included a cast of corporate characters including former Woolworths chief executive and Fairfax Media chair Roger Corbett.

Endeavour chairman Peter Hearl at the AGM in Sydney.Credit: Oscar Coleman

But the most important thing is that this annual general meeting was only a warm-up. The showdown between the Endeavour board and the company’s largest shareholder, billionaire activist Bruce Mathieson, is yet to play out.

The Endeavour chairman, Peter Hearl, and his board got their way at the AGM, thanks to successfully lobbying against Bill Wavish joining the board. He is a former Woolworths executive whose candidacy was supported by Mathieson.

But the board had better start limbering up for the war.

Mathieson wants Hearl’s scalp and his campaign to get it has only just started.

Nothing motivates shareholders to raise the pitchforks more than a falling share price. And when a billionaire activist investor such as Mathieson lit the fuse of discontent, the Endeavour annual meeting was always going to be explosive.

So hell-bent on the fight were Mathieson and arch nemesis Hearl, they were both prepared to weaponise confidential information to further their respective causes.

For example, Mathieson’s spokesperson stood before shareholders and divulged that Endeavour’s chief executive, Steven Donohue, had contacted the billionaire to sound him out about buying Endeavour’s pub empire. That information is extremely sensitive and could suggest the hotel business or Endeavour requires some radical change.

Not to be outdone, Hearl referred to an approach by Mathieson in which he floated the idea of Endeavour buying casino operator Star Entertainment – a troubled company in which Mathieson holds a sizeable stake.

Mathieson wants Hearl’s scalp and his campaign to get it has only just started.

Nothing ever came of either, but these are the sorts of conversations to which the public and small shareholders are never made privy. And make no mistake, these were stage-managed leaks.

The appearance of former Woolworths chief and Endeavour shareholder Roger Corbett only added to the show.

“You need to go forthwith. I call for your immediate resignation,” Corbett declared to Hearl, adding that if the Endeavour chairman only thought that the company’s problems were minor then “you indeed become the problem”.

During an argument that broke out between Hearl and Corbett, the chairman accused Corbett of having “close family ties” with Mathieson snr.

Former Woolworths chief and Endeavour shareholder called on chair Peter Hearl “to go forthwith”.Credit: Oscar Colman

But as previously mentioned, Mathieson has plans to use his 15 per cent stake to win this war. He reconfirmed his plans to convene a second shareholder meeting – in which he will propose a resolution to remove Hearl.

Hearl knows it is coming but isn’t backing down. At Tuesday’s annual meeting he could have outlined a plan to retire next year – and market it as an orderly transition. He chose to hold the line.

He must also understand that Mathieson has been garnering the support of other large shareholders who were not prepared to support Wavish but, like Mathieson, are concerned about the performance of Endeavour and want changes.

Behind closed doors, a number of big shareholders are looking to broker some kind of deal that will result in changes at the Endeavour board.

Pubs billionaire Bruce Mathieson wants to see change at Endeavour.Credit: Arsineh Houspian

After Tuesday’s annual meeting, I spoke to Mathieson who had lost none of the fire.

“My campaign won’t stop until the chair is gone. He can go the easy way or we can show him the door ... It took an AGM to coax the chairman out, and unsurprisingly, he was out of touch and failed to acknowledge the devastating 40 per cent fall in the share price.”

The question that Mathieson is not prepared to answer is whether there are others on the Endeavour board that he has in his sights and whether he wants to see off the chief executive, Donohue.

And if he has plans this radical, whether other large shareholders would be supportive.

There is plenty more to play out.

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