New blood added to GPI board

• Em­pow­er­ment group watches as ac­tivist share­hold­ers en­sure ap­point­ments of Mark Bow­man and Ronel van Dijk as di­rec­tors

Business Day - - Front Page - Marc Hasen­fuss Writer At Large hasen­[email protected]

Next week’s AGM of em­bat­tled em­pow­er­ment group Grand Pa­rade In­vest­ments, which owns the mas­ter fran­chise for Burger King in SA, should be an in­trigu­ing af­fair after a group of share­holder ac­tivists, speak­ing for 12.5% of the com­pany, ap­pointed two new di­rec­tors to the board at a re­con­vened ex­tra­or­di­nary gen­eral meet­ing.

Next week’s an­nual gen­eral meet­ing (AGM) of em­bat­tled em­pow­er­ment group Grand Pa­rade In­vest­ments (GPI), which owns the mas­ter fran­chise for Burger King in SA, should be an in­trigu­ing af­fair after a group of share­holder ac­tivists, speak­ing for 12.5%, ap­pointed two new di­rec­tors to the board at a re­con­vened ex­tra­or­di­nary gen­eral meet­ing (EGM), on Wed­nes­day night.

Former SABMiller ex­ec­u­tive Mark Bow­man and former Spur Cor­po­ra­tion fi­nan­cial di­rec­tor Ronel van Dijk were voted onto the GPI board as nonex­ec­u­tive di­rec­tors, re­ceiv­ing the sup­port of al­most 61% of share­hold­ers reg­is­tered to vote. They were two of four names nom­i­nated.

The other two nom­i­nees of the share­holder ac­tivists were Cora Fer­nan­dez and Seapei Mafoy­ane, who nar­rowly missed board seats with 53% of GPI’s reg­is­tered share­hold­ers vot­ing against them.

The changes in the board­room co­in­cided with news that highly re­garded turn­around spe­cial­ist Value Cap­i­tal Part­ners (VCP) had taken an 8.05% stake in GPI. VCP’s re­cent buy­ing spree helped push GPI’s price from about 221c to more than 300c a share.

The col­lec­tive con­sumer brands ex­pe­ri­ence that Bow­man and Van Dijk bring is seen as a crit­i­cal as GPI has bat­tled for vi­a­bil­ity in its food seg­ment, which in­cludes Burger King, Dunkin’ and Baskin-Rob­bins.

Per­haps more sig­nif­i­cant was that long-serv­ing GPI nonex­ec­u­tive di­rec­tors Alex Aber­crom­bie, Nor­man Ma­haraj and Wal­ter Geach re­tained their board seats by a sliver of votes. Aber­crom­bie re­ceived 53% sup­port and Ma­haraj and Geach 52% each.

Rashid Hargey and Nombeko Mlambo were both voted off, with only 38% of share­hold­ers of­fer­ing sup­port­ive votes.

Ob­servers at the EGM sug­gested it was prob­a­bly a vote by a large sin­gle share­holder, who opted for a com­pro­mise in terms of a board shake-up, that swung the EGM’s out­comes.

Ma­haraj and Geach, who re­tire by ro­ta­tion, and CEO Prabashinee Mood­ley will face an­other vote on whether they can be re-elected and, in Mood­ley’s case, ap­pointed as di­rec­tors at next week’s AGM.

Share­hold­ers will also have the chance to see Bow­man and Van Dijk “in ac­tion”. Many of them grum­bled on Wed­nes­day that none of the di­rec­tors put up for elec­tion to the board were present at the EGM.

Be­fore vot­ing be­gan, Aber­crom­bie, on the GPI board for 21 years, made an im­pas­sioned plea for share­hold­ers not to vote di­rec­tors off the board: This is a hos­tile takeover of our“board … they will dis­pense with the ex­ec­u­tive di­rec­tors later.”

He stressed that GPI’s de­ci­sion to re­duce its gam­ing in­vest­ments was be­cause the sec­tor was not a good in­vest­ment in the long term, with greater com­pe­ti­tion from sports bet­ting, num­bers bet­ting and il­le­gal gam­ing.

“It was a strate­gic de­ci­sion to en­ter the quick ser­vice restau­rant busi­ness … peo­ple have to eat, they don’t have to gam­ble.”

GPI ap­peared to take a more pla­ca­tory stance on Thurs­day, is­su­ing a state­ment that it hoped mar­ket con­fi­dence would be re­stored after the ap­point­ments.

COO Mohsin Ta­jb­hai said Bow­man and Van Dijk will add tremen­dous value and drive the busi­ness for­ward, par­tic­u­larly at Burger King.

He added that the EGM’s out­come also al­lows GPI to re­tain the skills and knowl­edge of Aber­crom­bie and Ma­haraj.

“Our im­me­di­ate fo­cus is to re­duce the dis­count at which we are trad­ing by un­lock­ing the value in our un­der­val­ued as­sets.”

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.