Cromwell-ARA tensions brew

Corporate raider Gary Weiss has been nominated as a director of Cromwell Property Group, which will be voted on at next month’s AGM Picture: John Feder

Tensions between Cromwell Property Group and its major shareholder ARA appear to have escalated further, with corporate raider Gary Weiss being nominated as a director of the property fund manager.

Cromwell managing director Paul Weightman would not comment but said information about nominated directors for election at its annual general meeting would be released to the market on Monday.

It is understood both Mr Weiss and Mr Weightman have scheduled separate meetings with proxy houses next week on matters to do with Cromwell.

ARA is also believed to be preparing to call an extraordinary general meeting at the company’s AGM in November if it is unable to achieve constructive negotiations, with dissatisfaction building for months.

Cromwell recently rescheduled its AGM from November 20 to November 28, and ARA chief executive John Lim has described Dr Weiss as “highly qualified” and said the company wanted to see governance of the board strengthened which was why he had been elected.

Mr Weightman has previously defended the governance of the company.

Dr Weiss is a board member of the Straits Trading Company which owns 21 per cent of ARA and his nomination was revealed by DataRoom online on Thursday. Should Dr Weiss be elected, it could be a case of history repeating itself in the property space. He is known for his moves to shake up Dreamworld theme park owner Ardent Leisure. Dr Weiss and other directors of Ariadne called the EGM to shake up the board and put up two new directors.

Ariadne purchased a stake of just under 10 per cent in Ardent at the time and Mr Weiss later became chairman, with chief executive Simon Kelly deciding to depart the company.

ARA has held 17.82 per cent of Cromwell, according to Bloomberg data, with its stake diluted by a $405m equity raising in June from which it was prohibited from participating.

But since its recent share buy its stake will once again increase to 19.7 per cent. ARA has about $US80bn ($114bn) under management in 23 countries.

Earlier this year, Cromwell tried to buy London-listed real estate investment trust RDI in what was believed to be a cash and scrip offer that would have diluted ARA’s share in the business, but it did not proceed.

Recently, ARA local boss David Blight stepped off Cromwell’s board after its stake was diluted as a result of Crowmell’s equity raising.

Cromwell controls an Australian direct property portfolio worth $2.5bn and has real estate under management across Australia, New Zealand and Europe worth $11.5bn.