New blood added to GPI board
• Empowerment group watches as activist shareholders ensure appointments of Mark Bowman and Ronel van Dijk as directors
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.”