Commander collapse, activist funds, Stokes EGM, ASX tilt and all the recent trades
February 2, 2010
Dear Mayne Reporters,
First things first, there are these new features on the site:
* Video on shareholder showbags.
* Audio of interview about foreign ownership and foreign debt with Mike Smith on 4BC last night.
* Updated "$100 million loss club" list, which now includes 10 entries for 2007-08 after the latest efforts from Asciano and Tabcorp joined the likes of ABC Learning, Allco and Centro. We haven't been in double figures since 2002-03 and given inflation and the scale of losses still to be announced, 2007-08 will surely finish up as a record for $100m-plus losses.
* Updated lists on happy and sad foreign investors in Australia after Starbucks and wine giant Constellation Brands joined the unhappy brigade.
Commander collapse
The big news today is this announcement by Commander Communications calling in the corporate undertakers, proving once again how hard it is competing against that big gorilla Telstra and how chairman Elizabeth Nosworthy is very adept at being associated with the destruction of shareholder value.
It also confirms that you never want to be the public company headquartered closest to my home. Bill Express holds that position presently and they collapsed a few weeks back. We used to live across the road from Commander's headquarters in South Melbourne and the place before that was closest to Primelife. Oh dear.
Commander has about $240 million in debt and $220 million in accounts payable so it's quite a give job for administrators Steve Sherman and Max Donnelly from Ferrier Hodgson and the receiver-managers from McGrath-Nicol who the banking syndicate have appointed to conduct business as usual whilst pursuing a sale of all assets.
Seven calls the EGM
Kerry Stokes is already in Beijing but Seven Network has today released the notice of meeting for its EGM on September 10 in Sydney to approve the latest buyback of 40 million shares or almost 20% of the company. In one of those rare moments of serendipity, I'm already flying to Sydney that day to give a breakfast speech at The American Club, so the timing is perfect to then pop down to Pyrmont for a 10am start with Stokes, who engaged in this slanging match with your publisher at the WA News EGM a few months back.
ASIC's attack on ASX conflicts
The AFR splashed today's paper with ASIC's big warning about a crackdown on conflicts of interest and poor disclosure in listed investment vehicles.
New ASIC commissioner Belinda Gibson laid it all out at the IFSA conference in Brisbane yesterday and the corporate plod's press release summarising her speech included the following, which looks specifically tailored for Babcock and Macquarie:
ASIC will also focus on major transactions involving listed investment vehicles that are trading at a significant discount to their announced asset values. These transactions aim to increase share price or provide an alternative exit mechanism for holders. These transactions can take the form of privatisation, substantial buy-backs, buy-outs of activist shareholders, asset sales and wind-ups.
We will look closely to see how conflicts of interest are handled. Providing arms length valuations and independent expert reports as to value will be of great assistance in our assessment, and that of the market.
ASIC will also look at adequacy and timeliness of disclosure. Directors should be frank about alternatives to the proposed transaction, and the possible benefits of the transaction to the person proposing it.
It was no wonder ASIC chairman Tony D'Aloisio didn't front because in a former life he was the ASX CEO who agreed to all those outrageous waivers which allowed Macquarie and Babcock not to reveal their full management contracts on various listed funds, such as Macquarie Media and Babcock & Brown Wind Partners.
ASX shareholders are being given a unique opportunity to clean up this mess at the AGM on September 24 in Sydney because I've nominated for the board on this platform:
Mr Mayne is standing on the single issue platform that ASX rescinds waivers granted to various Babcock & Brown and Macquarie Group listed vehicles that allow them to not fully disclose their management agreements for the likes of Macquarie Airports and Babcock & Brown Power. Once ASX forces this disclosure, and thereby takes the corporate governance and disclosure high road again, Mr Mayne will immediately resign. He has provided ASX with an undated letter of resignation conditional on the completion of such a disclosure process.
The ASX board is meeting next week to finalise the notice of meeting so let's hope they don't censor the platform, which should be endorsed by the two powerful proxy advisory houses, Risk Metrics and CGI Glass Lewis.
Two of the ASX board members, Macquarie Group director Peter Warne and Babcock & Brown audit committee chairman Michael Sharpe, clearly have a conflict and shouldn't be in the room when that comes up. It will also be interesting to see if ASX does the old “no vacancy rort” declaring that shareholders must turf one of the incumbents, BrisConnections chairman Trevor Rowe or Ord Minnett chairman Russell Aboud, if they want to back the challenger.
They did that in 2000, 2001 and 2002 which meant that even 100% of the directed proxies in favour wouldn't have been enough to win. That's Australian corporate democracy for you!
Arkmile calls off Challenger EGM
I've written before about the lack of activist funds in Australia and the desire to potentially set one up in 2009-10 and will be speaking on this topic at a big funds management conference in September.
The AFR's Street Talk column had a piece on activist funds today noting the following plays by various offshore activists in our market:
Arkmile: controlled by UK billionaires who wanted to wind up Challenger Infrastructure Fund which trades at a big discount to NTA.
Carousel Capital: UK fund stirring for change on the registers of Everest Babcock & Brown, EBI and HFA after earlier reaching a profitable settlement with the governance challenged Linq Resources fund.
Pendvest: owns 5% of Babcock & Brown Capital which has bounced nicely in recent weeks.
The big news today is that Challenger Infrastructure Fund has settled with its biggest shareholder, although it is not absolutely clear from this statement what they have offered in return for the cancellation of the winding up application. There are public platitudes about maximising unitholder value so presumably we'll soon find out how much value this activism has created.
Recent share trades
I've made about $800 this week after profitably trading in an out of ANZ and Aristocrat, although the recent $3000 plunge in OZ Minerals is marginally under water. Here are all the recent share trades:
August 6
Geodynamics Feb 2009 options : sold 1667 at 22c
Aristocrat Leisure Limited: sold 600 at $5.37
ANZ: sold 200 at $17.63
August 4
Oz Minerals Limited: bought 1600 at $1.88
July 31
Brisconnection Trust CTG : bought 1150 at 44c
That's all for now.
Keep doin' ya best and enjoy the opening ceremony tonight.
Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
First things first, there are these new features on the site:
* Video on shareholder showbags.
* Audio of interview about foreign ownership and foreign debt with Mike Smith on 4BC last night.
* Updated "$100 million loss club" list, which now includes 10 entries for 2007-08 after the latest efforts from Asciano and Tabcorp joined the likes of ABC Learning, Allco and Centro. We haven't been in double figures since 2002-03 and given inflation and the scale of losses still to be announced, 2007-08 will surely finish up as a record for $100m-plus losses.
* Updated lists on happy and sad foreign investors in Australia after Starbucks and wine giant Constellation Brands joined the unhappy brigade.
Commander collapse
The big news today is this announcement by Commander Communications calling in the corporate undertakers, proving once again how hard it is competing against that big gorilla Telstra and how chairman Elizabeth Nosworthy is very adept at being associated with the destruction of shareholder value.
It also confirms that you never want to be the public company headquartered closest to my home. Bill Express holds that position presently and they collapsed a few weeks back. We used to live across the road from Commander's headquarters in South Melbourne and the place before that was closest to Primelife. Oh dear.
Commander has about $240 million in debt and $220 million in accounts payable so it's quite a give job for administrators Steve Sherman and Max Donnelly from Ferrier Hodgson and the receiver-managers from McGrath-Nicol who the banking syndicate have appointed to conduct business as usual whilst pursuing a sale of all assets.
Seven calls the EGM
Kerry Stokes is already in Beijing but Seven Network has today released the notice of meeting for its EGM on September 10 in Sydney to approve the latest buyback of 40 million shares or almost 20% of the company. In one of those rare moments of serendipity, I'm already flying to Sydney that day to give a breakfast speech at The American Club, so the timing is perfect to then pop down to Pyrmont for a 10am start with Stokes, who engaged in this slanging match with your publisher at the WA News EGM a few months back.
ASIC's attack on ASX conflicts
The AFR splashed today's paper with ASIC's big warning about a crackdown on conflicts of interest and poor disclosure in listed investment vehicles.
New ASIC commissioner Belinda Gibson laid it all out at the IFSA conference in Brisbane yesterday and the corporate plod's press release summarising her speech included the following, which looks specifically tailored for Babcock and Macquarie:
ASIC will also focus on major transactions involving listed investment vehicles that are trading at a significant discount to their announced asset values. These transactions aim to increase share price or provide an alternative exit mechanism for holders. These transactions can take the form of privatisation, substantial buy-backs, buy-outs of activist shareholders, asset sales and wind-ups.
We will look closely to see how conflicts of interest are handled. Providing arms length valuations and independent expert reports as to value will be of great assistance in our assessment, and that of the market.
ASIC will also look at adequacy and timeliness of disclosure. Directors should be frank about alternatives to the proposed transaction, and the possible benefits of the transaction to the person proposing it.
It was no wonder ASIC chairman Tony D'Aloisio didn't front because in a former life he was the ASX CEO who agreed to all those outrageous waivers which allowed Macquarie and Babcock not to reveal their full management contracts on various listed funds, such as Macquarie Media and Babcock & Brown Wind Partners.
ASX shareholders are being given a unique opportunity to clean up this mess at the AGM on September 24 in Sydney because I've nominated for the board on this platform:
Mr Mayne is standing on the single issue platform that ASX rescinds waivers granted to various Babcock & Brown and Macquarie Group listed vehicles that allow them to not fully disclose their management agreements for the likes of Macquarie Airports and Babcock & Brown Power. Once ASX forces this disclosure, and thereby takes the corporate governance and disclosure high road again, Mr Mayne will immediately resign. He has provided ASX with an undated letter of resignation conditional on the completion of such a disclosure process.
The ASX board is meeting next week to finalise the notice of meeting so let's hope they don't censor the platform, which should be endorsed by the two powerful proxy advisory houses, Risk Metrics and CGI Glass Lewis.
Two of the ASX board members, Macquarie Group director Peter Warne and Babcock & Brown audit committee chairman Michael Sharpe, clearly have a conflict and shouldn't be in the room when that comes up. It will also be interesting to see if ASX does the old “no vacancy rort” declaring that shareholders must turf one of the incumbents, BrisConnections chairman Trevor Rowe or Ord Minnett chairman Russell Aboud, if they want to back the challenger.
They did that in 2000, 2001 and 2002 which meant that even 100% of the directed proxies in favour wouldn't have been enough to win. That's Australian corporate democracy for you!
Arkmile calls off Challenger EGM
I've written before about the lack of activist funds in Australia and the desire to potentially set one up in 2009-10 and will be speaking on this topic at a big funds management conference in September.
The AFR's Street Talk column had a piece on activist funds today noting the following plays by various offshore activists in our market:
Arkmile: controlled by UK billionaires who wanted to wind up Challenger Infrastructure Fund which trades at a big discount to NTA.
Carousel Capital: UK fund stirring for change on the registers of Everest Babcock & Brown, EBI and HFA after earlier reaching a profitable settlement with the governance challenged Linq Resources fund.
Pendvest: owns 5% of Babcock & Brown Capital which has bounced nicely in recent weeks.
The big news today is that Challenger Infrastructure Fund has settled with its biggest shareholder, although it is not absolutely clear from this statement what they have offered in return for the cancellation of the winding up application. There are public platitudes about maximising unitholder value so presumably we'll soon find out how much value this activism has created.
Recent share trades
I've made about $800 this week after profitably trading in an out of ANZ and Aristocrat, although the recent $3000 plunge in OZ Minerals is marginally under water. Here are all the recent share trades:
August 6
Geodynamics Feb 2009 options : sold 1667 at 22c
Aristocrat Leisure Limited: sold 600 at $5.37
ANZ: sold 200 at $17.63
August 4
Oz Minerals Limited: bought 1600 at $1.88
July 31
Brisconnection Trust CTG : bought 1150 at 44c
That's all for now.
Keep doin' ya best and enjoy the opening ceremony tonight.
Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.