By Jessica Yun
Pubs billionaire Bruce Mathieson has threatened to call for an extraordinary general meeting if Endeavour chairman Peter Hearl continues to resist calls to resign after retail veteran Bill Wavish failed in his bid to join the board at the company’s annual meeting.
Mathieson, the company’s largest shareholder with a 15.1 per cent stake, accused Hearl and chief executive Steve Donohue’s speeches as “reek[ing] of self-preservation” and “misread[ing] the room” at Tuesday’s meeting, where Hearl answered question after question about Endeavour’s operations, performance and declining share price.
Bruce Mathieson’s campaign to force Endeavour chair Peter Hearl (left) out is not over yet.Credit: Oscar Colman
“My campaign won’t stop until the chair is gone. He can go the easy way, or we can show him the door at an EGM,” Mathieson said in a statement to this masthead.
“While he thinks he’s saved face today, I encourage the chairman to listen to his investors, and leave the company. That is the only way we can move forward.”
The meeting is the culmination of a six-week campaign by Mathieson, who is incensed by the company’s performance and share price decline and has been endorsing Wavish, a former Woolworths executive, to be voted to the board, a recommendation that was doomed to fail after three powerful proxy advisers, Woolworths and the Endeavour board itself refused to support it.
The majority (72.3 per cent) of Endeavour shareholders rejected Wavish’s election to the board, but Mathieson said Hearl would be “highly uncomfortable” with the traction Wavish managed to gain.
“Every vote for Bill Wavish is a message to the board that they are failing and change is required.”
After the meeting, Hearl issued a statement describing the rejection of Wavish’s election as a “comprehensive repudiation” and said it was “profoundly disappointing” that Mathieson’s campaign had “unquestionably” resulted in further destruction of shareholder value.
“We recognise there are key areas for improvement,” said Hearl, who also noted that 12.7 per cent of shareholders had voted against the re-election of Bruce Mathieson Jnr to the board.
“It is important and appropriate for the board to carefully consider the shareholder sentiment towards Mr Mathieson Jnr as we seek to work constructively with our major shareholder going forward.”
While the remuneration report received overwhelming approval, with 90.1 per cent of votes in favour, the proposal to provide long-term incentive grants to Donohue received a protest vote, with 34.7 per cent of shareholders voting against it.
Despite criticisms aired at the AGM, Endeavour’s share price closed 0.6 per cent higher on Tuesday.
Mathieson did not personally attend the meeting, held in Sydney, but asked questions through his representative, Ross Blair-Holt, who confirmed reports that Donohue had called Mathieson about a month ago to ask whether he wanted to purchase the hotels business.
“It’s not speculation. My question is, did Mr Donohue have board approval to make that approach to Bruce?” Blair-Holt asked.
Ross Blair-Holt, representative for Bruce Mathieson senior, clashed with Endeavour chairman Peter Hearl.Credit: Oscar Colman
“Look, I’m not going to comment on every piece of speculation and accusation that appears in the press. If I did that, we’d probably be here for a week,” Hearl responded. “Suffice to say that hotels are a critical part of Endeavour’s portfolio and our future growth, and we’re committed to their future.”
Hearl was also forced to endure a blistering 10-minute attack by former Woolworths chief executive Roger Corbett, who accused the chairman of making demeaning comments about Mathieson by describing his attempt to install Wavish as trying to exert “disproportionate control”.
“The retail business has completely lost its way,” declared Corbett, who grew Woolworths’ liquor business while he was chief executive between 1999 and 2006 before that division was spun off to become Endeavour in mid-2021.
Hearl had “become a problem” for the business and had “disenfranchised [him]self as our chairman”, he added.
“You, sir, should go immediately, and let someone else take the chair who does recognise we have serious problems … And that is the conclusion of today’s meeting: I call for your immediate resignation,” said Corbett, rounding off his lecture to a round of applause.
Hearl said he had “significant disagreements” with Corbett’s characterisation of company performance and said Endeavour had worn significant costs because of the demerger and COVID.
Former Woolworths CEO Roger Corbett launched a 10-minute attack on Peter Hearl.Credit: Oscar Colman
“I appreciate the comments … but I don’t intend to step down. I’ve been elected chairman of the board, and will continue to do so. I’m very committed to making sure we work through the dispute we have with the Bruce Mathieson Group, and we’ll be doing so as expeditiously as we possibly can,” said Hearl.
The board also faced questions about why the pubs and pokies operator refused to reveal its gambling earnings, which Hearl said “would not necessarily mean a lot” and would be at the detriment to Endeavour in terms of competitiveness.
In their addresses, both Donohue and Hearl acknowledged a number of times that more needed to be done to boost share price value.
Mathieson’s criticisms of the company had caused “significant disruption”, but Hearl said Endeavour and the Mathieson group shared many of the same objectives, including sales momentum, cost discipline, lifting returns in hotels, and greater transparency in capital management.
“While we are focused on our share price performance, we prioritise long-term value creation.”
The pair outlined a renewed focus on driving higher returns in its hotels portfolio and said the company would introduce new “scorecard metrics” to measure progress on key strategic pillars and said more details would be revealed at its investor day on December 6.
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