Former Woolworths boss Bill Wavish’s Endeavour board bid backed by Mathieson clan
A civil war is set to erupt within the boardroom of Dan Murphy’s owner Endeavour Group as retail veteran Bill Wavish wins support of pubs baron Bruce Mathieson to join the board.
A civil war has erupted within the boardroom of the liquor retailer, hotels and pokies owner Endeavour Group, after former Woolworths boss Bill Wavish won support from Endeavour’s biggest shareholder, Bruce Mathieson Snr, to nominate as a director.
Mr Wavish has fired the opening shots in what could be a protracted public war, describing parts of the Endeavour business – such as its 1700 Dan Murphy’s and BWS stores – as “appalling” and blaming the board for “blowing away” money as its debt levels skyrocketed.
Mr Mathieson Snr, the billionaire pubs baron whose hotels and gaming empire was merged with Woolworths 20 years ago and then spun out in 2021 into the independently listed $9.5bn Endeavour business, on Tuesday night described Mr Wavish as a “brilliant businessman”.
The forthright billionaire then turned his guns on Endeavour’s chairman and chief executive for its recent ills and cratering share price.
“Endeavour is very, very poorly run under the guidance of (chairman) Peter Hearl and (CEO) Steve Donohue, and the figures prove it, don’t they? We are not going ahead, we are going backwards and in the industry hotels aren’t dropping off in value, and it has performed very poorly under this management,” Mr Mathieson told The Australian.
The Mathieson family’s stake in Endeavour has lost $268m in value since the start of the year.
In August Endeavour shares fell more than 4 per cent after its annual results missed analyst expectations and the stock is down 23 per cent in the past 12 months.
However, its operations were significantly disrupted by forced lockdowns of its pubs through the early years of Covid-19 and then its pokies profitability was savaged by gaming reforms in Victoria.
The personal attack on Mr Hearl and Mr Donohue carries extra weight and firepower given Mr Mathieson’s family owns 15 per cent of Endeavour, he is a former director and his son, Bruce Mathieson Jr, is a current Endeavour director.
The wider Mathieson family is understood to support Mr Wavish joining the board and is frustrated by what members view as roadblocks from some on the Endeavour board to rebuff Mr Wavish’s candidacy.
The Mathieson family is believed to have been disappointed with Endeavour’s performance for some time, and the shrinking profitability of its operations that centre around liquor chains Dan Murphy’s and BWS as well as its 354 pubs and associated gaming machines.
Now it looks as though the Mathieson family will support Mr Wavish’s candidacy for the Endeavour board. Mr Wavish was finance director at Woolworths when it bought Dan Murphy’s in 1998 – and he oversaw its huge growth from only six stores in Victoria to a national liquor retail champion with hundreds of stores across Australia.
Mr Mathieson has pledged his 15 per cent stake to support Mr Wavish as a director if the vote is taken at the upcoming AGM. It is unclear whether Woolworths will vote its 9.1 per cent stake at the AGM, support the board’s recommendation or abstain.
However, Mr Wavish will need approval from state regulators and clear probity checks before he can become an Endeavour director. The Endeavour constitution states that to stand for “appointment” or “election”, the candidate must have obtained all necessary regulatory approvals. The board can only appoint directors after regulatory approvals have been gained, and this process can take as long as six months.
A civil war within the top-50 ASX company Endeavour is believed to have been simmering for a few months. It’s understood Mr Wavish has been in contact with the board over his bid to become a director and his views on how the businesses could be improved.
Mr Hearl and two other Endeavour non-executive directors met with Mr Wavish after he nominated in late August to be a director. The notice was issued on the last day before nominations closed. They have invited him to participate in the already commenced process of appointing two new directors, which he apparently declined.
However, that clandestine battle is now about to erupt into a very public war. Endeavour is expected to issue its notice of meeting on Wednesday for its upcoming annual general meeting and it is unclear if they will allow Mr Wavish to nominate as a director. The dispute partly rests on Mr Wavish not having state approval and probity clearance to be an Endeavour director.
In expectations of a battle over his candidacy and the notice of meeting, Mr Wavish began his public campaign on Tuesday night when he set out his experience, his skills and the desperate need for Endeavour to change direction and halt what he sees as “value destruction”.
“It is appalling what has happened to parts of that business and the amount of money they have blown away,” Mr Wavish told The Australian.
“I have a particular place in my heart for Dan Murphy’s and there is so much value destruction going on, depending on how you want to count it, but it is an awful lot.”
Mr Wavish claimed that one Dan Murphy’s store in Sydney he had visited was so bad that it proved to him that Endeavour had “completely lost the plot” with the retail chain.
Mr Wavish is the former executive chair of Myer and had numerous executive roles at Woolworths between 1999 and 2006, including chief financial officer, finance director and head of supermarkets.
“During my tenure at Woolworths, I had the great privilege of overseeing the formation of BWS, the expansion of Dan Murphy’s and the acquisition of ALH (Mr Mathieson’s hotels empire) and many prominent hotels that are still a core part of Endeavour’s portfolio,” he said.
“It is with this deep knowledge, and the support of other shareholders, that I am committed to securing a board seat and working collaboratively on a much-needed turnaround.”
Mr Wavish said he was concerned about Endeavour’s rising debt levels and what he said was the underperformance of its liquor stores, chiefly Dan Murphy’s which he said had “lost its way” and was no longer “everyday low price” but marketing itself as “price matching”, which was not what the market leader should do.
He said Endeavour’s capital expenditure disciplines were “not being maintained” and he also questioned the logic in Endeavour recently buying up a string of wineries such as Shingleback, Cape Mentelle and Josef Chromy Wines.
But he said he needed to know more about the internal finances and operations of Endeavour to get a true picture of its problems, which he could only get access to once he was made a director.
An Endeavour spokesman said a formal process to appoint new directors had begun.
“As part of the board’s orderly approach to succession planning, a formal process to appoint two new non-executive directors for the Endeavour Group is under way,” the spokesman said.
“The board acknowledges Mr Wavish’s nomination, having commenced engagement with him and extended the invitation to participate in the current board recruitment process under way.”
Endeavour believes its financial performance since the demerger from Woolworths is solid, with pre-tax earnings up 13.8 per cent and earnings per share growth of 19 per cent.
Its Dan Murphy’s “MyDan’s” loyalty program had rapidly grown to 5.2 million active members and a scan rate of 79 per cent – higher than any other retailer’s loyalty program, it said.
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