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ARA moves on chair Geoff Levy ‘to protect investment in Cromwell’ and nominate Gary Weiss

Chairman names his departure date after ARA Asset Management proposes calling extraordinary general meeting.

Dr Gary Weiss. Picture: Hollie Adams
Dr Gary Weiss. Picture: Hollie Adams

A new chapter in the bitter battle for control of the Cromwell Property Group has opened with dissident shareholder Singaporean ARA Asset Management’s threat to call extraordinary general meeting to dislodge the incumbent chairman prompting him to name his departure date.

ARA, which has a 23.7 per cent interest in the company, said it would seek to remove chairman Geoff Levy as a director and it again nominated corporate raider Gary Weiss to the Cromwell board.

ARA last year narrowly lost a vote to install Dr Weiss and its noisy complaints have also prompted Cromwell to tap two banks to advise on its future.

“It has become increasingly evident that this considered action is required to protect ARA’s substantial investment in Cromwell, which at the current price is worth approximately $750m,” ARA said in a statement.

ARA’s move came after a proposal to install Dr Weiss was narrowly defeated at Cromwell’s annual general meeting last November.

Cromwell responded this afternoon with Mr Levy, a former Investec Bank chairman, saying he would step down February 26. Deputy chair Leon Blitz will step up as chairman, with director Andrew Fay to become deputy chair.

Mr Levy said he had wanted to ensure an orderly transition after two new independent non-executive directors were elected last year.

Cromwell said it had initiated a full “strategic review” to consider options to maximise value for shareholders.

It has tapped investment banks Goldman Sachs and UBS, which could see the company’s strategy switched up.

Cromwell said ARA’s ongoing agitation, including notification that it intended to call a meeting to remove Mr Levy and planned to nominate Dr Weiss, had brought forward the announcement.

ARA claimed Cromwell’s board had refused to recognise the increasing groundswell of investor discontent, demonstrated by four of the nine annual meeting resolutions failing, and other contested resolutions only requiring less than a 2 per cent swing in voting to have failed.

The resolution to appoint Dr Weiss as a director lost by only a very narrow margin, evidencing the support of a significant proportion of Cromwell’s investors, ARA said.

Mr Levy, who has chaired Cromwell for nearly 12 years, has previously stated he will resign “in 2020” but has given no exit date,

ARA accused Mr Levy of overseeing a “very public and hostile battle” between the board and itself, saying this “undoubtedly had” an adverse impact on Cromwell, and its public and commercial standing.

“The chairman’s inability or unwillingness to engage with its largest security holder in a collaborative and constructive manner reflects poorly on the leadership of Cromwell,” ARA said.

“ARA sees no value or advantage in Mr Levy continuing as chairman any longer,” it added, calling on him to resign immediately.

Their battle pits Cromwell, that manages about $12bn of assets, against ARA, that runs an $S83bn ($90bn) empire across more than 100 cities in 23 countries.

The company has been at loggerheads with Cromwell after it was cut out of a placement last year amid disagreements about Cromwell’s strategy and as the pair competed for assets.

The Australian Takeovers Panel last month rejected a move by Cromwell to force a selldown of shareholdings held by ARA and the Singapore-based Tang family, on the basis they were acting in concert.

Cromwell said the pair were “associated and consequently hold a combined, but undisclosed, relevant interest and voting power of up to 35.85 per cent”.

ARA’s campaign to appoint Dr Weiss last year was marked by attacks on Cromwell chief executive Paul Weightman over the company’s expansion in Poland’s shopping centre sector and an earlier takeover play for a British listed fund, RDI REIT.

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Original URL: https://www.theaustralian.com.au/business/property/ara-moves-on-chair-geoff-levy-to-protect-investment-in-cromwell-and-nominate-gary-weiss/news-story/3c2dc20e56b607a738a79ddd0ae89efe