Pubs billionaire Bruce Mathieson Senior has written to Endeavour shareholders urging a vote for Bill Wavish

Pubs billionaire Bruce Mathieson Senior has kicked off his election campaign for Bill Wavish, writing to more than 420,000 Endeavour Group shareholders to rally their support at the AGM.

Billionaire pubs baron Bruce Mathieson Senior has written a letter to Endeavour Group’s more than 420,000 shareholders urging them to support Bill Wavish’s election as a director to end “value destruction” at the company and “restore growth, discipline and hold managers to account”.

In the start to the proxy war over the election of former Woolworths supermarkets and liquor boss Mr Wavish to the board at the Endeavour AGM at the end of this month, Mr Mathieson Sr, who is Endeavour’s largest shareholder, is also taking out newspaper advertising to get fully behind Mr Wavish’s candidacy.

The heated battle between Mr Mathieson Sr, who owns 15 per cent of the company, and the board of Endeavour, the owner of Dan Murphy’s, BWS and the nation’s largest pubs portfolio, was sparked late last month and has now blown up into the biggest corporate brawl on the public market.

Mr Mathieson Sr is using his large block of shares to support Mr Wavish, and is now urging other shareholders to support his election, sending out a letter to its large shareholder base to campaign for Mr Wavish and what they both see as urgent changes at board and management level to arrest a falling share price and slowing sales.

In his letter, Mr Mathieson Sr said many Endeavour investors would share his “extreme disappointment” with Endeavour’s “disastrous performance” since listing on ASX.

“I am deeply concerned about the current and future strategic and operational priorities of the business, and current leadership’s ability to reverse these alarming trends, without fresh ideas in the boardroom,” Mr Mathieson has told investors.

He listed a catalogue of issues he claims is currently plaguing Endeavour including share price underperformance against its peers, $5.6bn shareholder value erased since August 2022, its retail jewel Dan Murphy’s losing market share, same-store sales slowing, high debt levels and weak balance sheet discipline.

Pubs billionaire Bruce Mathieson Sr. Picture: Russell Shakespeare/The Australian

Mr Mathieson Sr also savaged the board of Endeavour for owning a small amount of shares in the company. Although this would exclude his son, Bruce Mathieson Junior, who is currently a director.

“The Endeavour board (which collectively owns less than 0.024 per cent of Endeavour’s shares) has presided over material value destruction and overseen a persistent decline in operating performance and strategy to continue unchecked.

“Endeavour’s share price has decreased 37.4 per cent peak-to trough, equating to $5.6bn of shareholder value being wiped out since August 2022. For a business of this historical quality and market position, this is completely unacceptable.”

However, Endeavour disputes Mr Mathieson Sr’s claims about the company’s performance and argues the billionaire’s recent statements and figures in a letter to its chairman about the company’s financial results of the last few years has been falsely portrayed to suit his narrative.

“By error or omission, the claims in the latest correspondence from Mr Mathieson Sr clearly misrepresents the chair’s letter which detailed Endeavour Group’s performance over the 2019-2023 financial period,” the Endeavour spokeswoman said.

“Mr Mathieson has selected the two year post demerger period, (fourth quarter fiscal 2020, first quarter to third quarter 2021 vs fiscal 2023), which begins during the Covid-19 pandemic when retail was open yet most hospitality venues were shut, to give a misleading impression of performance.

“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.”

Mr Mathieson further said in his letter to shareholders that Endeavour’s retail business was going backwards, with competitors such as Coles Liquor eroding Dan Murphy’s and BWS market share.

“Since Endeavour demerged from Woolworths nine quarters ago, retail sales have reduced by 4.3 per cent and Coles Liquor has increased its sales by 0.8 per cent on a 12-month rolling basis.

“Endeavour is insulating this poor retail performance with a value destructive store rollout campaign. Store efficiency has plummeted with revenue per store declining from $6.2m to $5.8m in the same period, and like-for-like growth of negative 2.9 per cent in fiscal 2023. This validates my concerns that Endeavour’s current management and board are not fit to drive a coherent strategy to deliver earnings growth and returns for all shareholders.”

He also claims Endeavour is presiding over an “ill-disciplined approach to managing corporate and other overhead costs” that has resulted in operating costs jumping by 11.4 per cent in 2023.

“There is no tangible evidence of a coherent cost strategy and without a fundamental reset, I am concerned for the long-term viability of our shareholding. I expect the true cost of managing Endeavour’s core operations would be drastically lower than the current exorbitant spend.”

He ends the letter by arguing that Mr Wavish has the industry and corporate experience that the Endeavour board so desperately needed, and to support his candidacy at the Endeavour AGM on October 31.

On Wednesday, lawyers acting for Mr Mathieson Sr accused Endeavour of overseeing a “chaotic and misleading” process for its upcoming AGM that has tainted the outcome, making it “grossly unfair” to Mr Wavish.

They demanded the AGM be delayed, new notice of meeting materials sent out to the more than 420,000 Endeavour shareholders, and have signalled Mr Mathieson Sr was prepared to use his power and influence to call an extraordinary general meeting and hold another vote for Mr Wavish.