The billionaire and bottle shops boardroom brawl is getting hotter

It’s denunciatory letters at 20 paces in the battle between billionaire pub baron Bruce Mathieson and the board of Endeavour, in which he is the largest shareholder.

And the action is about to get hotter. Heading into next month’s annual shareholder meeting, a full-blown proxy fight will begin. While this is ostensibly a billionaire and bottle shops brawl, the unspoken war is between Mathieson and Woolworths.

Billionaire Bruce Mathieson is livid with what he says is the abysmal performance of the hotel, pokies and retail liquor group Endeavour.Credit: Arsineh Houspian

For years, these two ran a cosy joint venture that owned most of the Woolworths retail bottle shops (such as Dan Murphy’s and BWS) and the string of pubs dotted around the country.

After the demerger of the liquor and pubs/pokies business from the supermarkets business in 2021, Endeavour was born as a publicly listed company. Mathieson now has the largest stake, with 15 per cent, and Woolworths is the second-biggest shareholder, with 9.1 per cent.

Mathieson doesn’t support the Endeavour board, but Woolworths has remained silent and thus appears to support it.

So as it now stands, the future governance of this $9.2 billion pubs and bottle shops empire will fall to institutional shareholders and the large group of 400,000 retail holders that populate the remainder of the share register.

As Mathieson sees it, the poor performance of Endeavour’s board and management is directly responsible for the slippage in the size of his bank account.

Thus Endeavour’s mum and dad shareholders are about to be bombarded by pollsters from both sides, and find themselves targeted by an advertising campaign soon to kick off. At the same time, investment banks have been hired by both to hustle support from large shareholders.

Mathieson is livid with what he says is the abysmal performance of the hotel, pokies and retail liquor group. He says the decision to implement gambling reforms early has directly impacted the company’s revenue.

Mathieson’s stake in Endeavour is his largest asset so as he sees it, the poor performance of its board and management is directly responsible for the slippage in the size of his bank account. Since the demerger, Endeavour’s shares have fallen 15 per cent; over the same period the ASX 200 had gained 11 per cent.

The battle came to light recently when Mathieson offered his support for former Woolworths executive Bill Wavish joining the Endeavour board. Wavish didn’t have the endorsement of the Endeavour board, who didn’t even want him on the ticket. Although some last minute negotiating between Endeavour and the ASX has meant that shareholders will now get the opportunity to vote on Wavish’s candidacy.

Bill Wavish’s bid to join the board will be put to a vote at the annual general meeting.Credit: Josh Robenstone

But the Endeavour board is still not endorsing him.

That said, even Wavish supporters don’t believe that one non-executive director can, on his own, turn around what Mathieson claims is a poorly run company.

So for Mathieson, regardless of whether the Bill-for-board-battle is successful, the billionaire’s fight is only getting started. After branding decisions by Endeavour chairman Peter Hearl “disgraceful”, Mathieson has called for wholesale change around the board table.

When asked about whether he would end the fight if Wavish was not elected, Mathieson indicated there was plenty left to do. “I will be around for a long time,” he warned.

A string of letters between Hearl and Mathieson have been lobbing every few days – each contesting how the other measures Endeavour’s performance – most of which small shareholders could find difficult to follow.

Endeavour disputes Mathieson’s criticism. “To build trust in leadership and governance, a company needs to demonstrate forensic attention to detail and a strong understanding of financial materials. Unfounded and/or misleading statements provide a disservice to shareholders and serve to further undermine confidence in what is a very strong and resilient business,” a spokesman for Endeavour said on Wednesday.

But on Wednesday, Mathieson’s lawyers took issue with what they said was a misleading physical notice of meeting Endeavour sent to shareholders.

“If you do not take these steps to rectify the chaotic, misleading and unfair way that Endeavour has communicated with shareholders concerning Mr Wavish’s election, and as a result that resolution is unsuccessful, our client may be left with no choice but to convene or require that Endeavour convenes a further meeting of shareholders to vote on Mr Wavish’s election and the governance of Endeavour,” they said in a letter to Endeavour.

Meanwhile, history is littered with stories of large dissident shareholders fighting for change. They normally go one of two ways.

Solomon Lew unsuccessfully fought with the board of Myer for several years but is now on the cusp of success. He engineered this by buying additional Myer shares.

Marcus Blackmore similarly came to blows with the board of the vitamin business Blackmores, which was founded by his father. He ultimately sold his stake and walked away wealthy.

At this point, Mathieson doesn’t seem to have an appetite for either.

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