Ten board tilt and Toll rolled
October 31, 2010
Dear Mayne Report subscribers,
The following have been submitted for today's Crikey which is due out in the next hour.
Paul Little rolled, stand by for a Mayne tilt in 2012
The Toll Holdings board suffered the humiliation of having to withdraw a proposed new constitution at the AGM in Melbourne this morning after only 58% of shareholders supported the move which needed a 75% super majority so get up. See chairman Ray Horsburgh's explanation on page 30 of the presentation pack.
The sticking point was what might be called "the Stephen Mayne clause". At the moment, any single Toll shareholder can nominate for the board, as occurs with most major Australian public companies. Toll was proposing a new barrier to entry such that any external candidate would require 100 wet signatures from shareholders or the support of more than 5% of all shares on issue to get on the ballot paper.
For a company that has never had an external candidate run for its board, this was a remarkably defensive move. Perhaps it reflects the fact that founder CEO Paul Little is transitioning from managing director to a humble non-executive director. At that point, his exemption from the three yearly election cycle will be gone. Maybe someone should nominate against him when he first comes up for election in 2012.
James Packer should run the gauntlet of an AGM vote at Ten
Stephen Mayne writes:
Having triggered the first ever contested election at the 2009 Ten Network Holdings AGM 11 months ago, the temptation to enter the fray as control hangs in the balance was just too much to resist.
Ten's general counsel is not replying to correspondence but assuming Ten's constitution requires 35 days lead time for board nominations, external candidates have until next Friday, November 5, to get on the notice paper for the December 9 AGM in Sydney.
And if the Ten board decides to resist James Packer's request for two board seats, the same rule applies to him.
If Packer goes hostile he might not be the only external candidate competing for votes and a say over Ten's future strategy. This morning I emailed and faxed through a formal nomination and requested the following platform be distributed to all 22,000 shareholders eligible to vote:
"Stephen Mayne, age 41. Bcom (Melb). Stephen Mayne is a Walkley Award winning business journalist, professional shareholder advocate and an elected local government councillor in the City of Manningham. He publishes the corporate governance ezine www.maynereport.com and was the founder of www.crikey.com.
Mr Mayne is standing for the board on a platform that Ten Network Holdings Ltd (TNHL) resist the influence of major shareholders with direct conflicts or close associations with competitors.
He has petitioned the competition and media regulators that James Packer and Bruce Gordon not be permitted to vote their stock and shape the board composition and strategic direction of TNHL.
Mr Mayne has spent 20 years in the news business and supports TNHL's strategy to substantially expand its news offering, thereby competing more vigorously with Seven and Nine.
Mr Mayne also ran for the TNHL board last year on a platform that retail shareholders were owed a share purchase plan after a selective $138 million institutional placement at $1.15 in August 2009. TNHL continues to resist calls to remedy this situation and is one of a very small minority of ASX200 companies over the past two years who have placed capital at a discount to institutions without placing shares to its retail investors on the same terms through a SPP.
By refusing to do an SPP, the TNHL directors have consciously diluted their retail shareholders as a class to the tune of many millions of dollars. Such treatment, especially in the wake of repeated correspondence on this matter, makes it appropriate for retail investors to now appoint a new director to more vigorously represent and protect their interests.
There are numerous conflict of interest questions at Ten which were debated during this feisty 10 minute interview with 774 ABC Melbourne morning presenter Jon Faine earlier today.
What Mark Day dismisses as my “conspiracy theories” about Packer, Ten, casinos, conflict of interest and political influence have now been laid out in detail across multiple platforms including this piece for the Fairfax websites, this piece for The Drum and during this interview on 891 ABC Adelaide.
It has now all been pulled together in one place on Crikey and the regulators are formally on notice that they must determine who is eligible to vote and who can exercise control over Ten through the appointment of directors in a contested environment at the forthcoming AGM.
The AFR's Neil Shoebridge reported today that five of the eight directors of Ten – Brian Long, David Gordon, Dean Hawkins, Paul Gleeson and Christine Holgate - were up for election at the AGM on December 9.
Curiously, he did not include executive chairman Nick Falloon, who was last elected in 2007 and therefore should be on the slate.
However, because CEO Grant Blackley is not a director, the Ten board could actually pull a swifty and grant Falloon a board seat in perpetuity on the basis that he is the chief executive.
The majority of Australia CEOs use this exemption but the only two executive chairs who've done it over the years were Rupert Murdoch and John Gay at Gunns. Murdoch, who is presumably taking a close interest in proceedings whilst in Sydney, wasn't elected for decades in Australia as we discovered at the 2007 News Corp AGM in New York.
Surely Shoebridge has just made a mistake and Nick Falloon is not going to hang onto his job in such a sneaky fashion.
The proper process here is for board control to be decided at the AGM by shareholders who the regulators declare are entitled to influence the company under our competition and media ownership laws.
I reckon both Lachlan Murdoch and James Packer are conflicted. They should follow my lead and nominate as external candidates, thereby forcing the Ten board to make a decision around endorsement and the regulators to decide about the conflict of interest and control issues.
* Footnote: Ten's general counsel Stephen Partington subsequently emailed to say that nominations had closed so we were untimely.
That's all for now.
Do ya best, Stephen Mayne
The following have been submitted for today's Crikey which is due out in the next hour.
Paul Little rolled, stand by for a Mayne tilt in 2012
The Toll Holdings board suffered the humiliation of having to withdraw a proposed new constitution at the AGM in Melbourne this morning after only 58% of shareholders supported the move which needed a 75% super majority so get up. See chairman Ray Horsburgh's explanation on page 30 of the presentation pack.
The sticking point was what might be called "the Stephen Mayne clause". At the moment, any single Toll shareholder can nominate for the board, as occurs with most major Australian public companies. Toll was proposing a new barrier to entry such that any external candidate would require 100 wet signatures from shareholders or the support of more than 5% of all shares on issue to get on the ballot paper.
For a company that has never had an external candidate run for its board, this was a remarkably defensive move. Perhaps it reflects the fact that founder CEO Paul Little is transitioning from managing director to a humble non-executive director. At that point, his exemption from the three yearly election cycle will be gone. Maybe someone should nominate against him when he first comes up for election in 2012.
James Packer should run the gauntlet of an AGM vote at Ten
Stephen Mayne writes:
Having triggered the first ever contested election at the 2009 Ten Network Holdings AGM 11 months ago, the temptation to enter the fray as control hangs in the balance was just too much to resist.
Ten's general counsel is not replying to correspondence but assuming Ten's constitution requires 35 days lead time for board nominations, external candidates have until next Friday, November 5, to get on the notice paper for the December 9 AGM in Sydney.
And if the Ten board decides to resist James Packer's request for two board seats, the same rule applies to him.
If Packer goes hostile he might not be the only external candidate competing for votes and a say over Ten's future strategy. This morning I emailed and faxed through a formal nomination and requested the following platform be distributed to all 22,000 shareholders eligible to vote:
"Stephen Mayne, age 41. Bcom (Melb). Stephen Mayne is a Walkley Award winning business journalist, professional shareholder advocate and an elected local government councillor in the City of Manningham. He publishes the corporate governance ezine www.maynereport.com and was the founder of www.crikey.com.
Mr Mayne is standing for the board on a platform that Ten Network Holdings Ltd (TNHL) resist the influence of major shareholders with direct conflicts or close associations with competitors.
He has petitioned the competition and media regulators that James Packer and Bruce Gordon not be permitted to vote their stock and shape the board composition and strategic direction of TNHL.
Mr Mayne has spent 20 years in the news business and supports TNHL's strategy to substantially expand its news offering, thereby competing more vigorously with Seven and Nine.
Mr Mayne also ran for the TNHL board last year on a platform that retail shareholders were owed a share purchase plan after a selective $138 million institutional placement at $1.15 in August 2009. TNHL continues to resist calls to remedy this situation and is one of a very small minority of ASX200 companies over the past two years who have placed capital at a discount to institutions without placing shares to its retail investors on the same terms through a SPP.
By refusing to do an SPP, the TNHL directors have consciously diluted their retail shareholders as a class to the tune of many millions of dollars. Such treatment, especially in the wake of repeated correspondence on this matter, makes it appropriate for retail investors to now appoint a new director to more vigorously represent and protect their interests.
There are numerous conflict of interest questions at Ten which were debated during this feisty 10 minute interview with 774 ABC Melbourne morning presenter Jon Faine earlier today.
What Mark Day dismisses as my “conspiracy theories” about Packer, Ten, casinos, conflict of interest and political influence have now been laid out in detail across multiple platforms including this piece for the Fairfax websites, this piece for The Drum and during this interview on 891 ABC Adelaide.
It has now all been pulled together in one place on Crikey and the regulators are formally on notice that they must determine who is eligible to vote and who can exercise control over Ten through the appointment of directors in a contested environment at the forthcoming AGM.
The AFR's Neil Shoebridge reported today that five of the eight directors of Ten – Brian Long, David Gordon, Dean Hawkins, Paul Gleeson and Christine Holgate - were up for election at the AGM on December 9.
Curiously, he did not include executive chairman Nick Falloon, who was last elected in 2007 and therefore should be on the slate.
However, because CEO Grant Blackley is not a director, the Ten board could actually pull a swifty and grant Falloon a board seat in perpetuity on the basis that he is the chief executive.
The majority of Australia CEOs use this exemption but the only two executive chairs who've done it over the years were Rupert Murdoch and John Gay at Gunns. Murdoch, who is presumably taking a close interest in proceedings whilst in Sydney, wasn't elected for decades in Australia as we discovered at the 2007 News Corp AGM in New York.
Surely Shoebridge has just made a mistake and Nick Falloon is not going to hang onto his job in such a sneaky fashion.
The proper process here is for board control to be decided at the AGM by shareholders who the regulators declare are entitled to influence the company under our competition and media ownership laws.
I reckon both Lachlan Murdoch and James Packer are conflicted. They should follow my lead and nominate as external candidates, thereby forcing the Ten board to make a decision around endorsement and the regulators to decide about the conflict of interest and control issues.
* Footnote: Ten's general counsel Stephen Partington subsequently emailed to say that nominations had closed so we were untimely.
That's all for now.
Do ya best, Stephen Mayne