MYER CHAIRMAN FIGHTS BACK AGAINST SOLOMON LEW AT GROUP AGM
Written on the 24 November 2017 by David Simmons
THE ongoing war of words between head of Premier Investments Solomon Lew and Australian department chain Myer has come to a head at Myer's (ASX: MYR) AGM.
Solomon Lew has made a dent in Myer's armour but fails to tear down the board.
Lew, with a 10.8 per cent stake in Myer via Premier Investments, opposed all of the chain's resolutions at the AGM.
With final figures still to be released, proxies at the meeting indicated about 29 per cent of votes went against Myer's remuneration report above the 25 per cent needed for a first strike.
This means if Myer suffers a second strike at the next AGM in a year's time, the entire board will spill.
Garry Hounsell's appointment as chair appears to be safe with about 67 per cent of proxy votes in his favour.
JoAnne Stephenson and Julie Morrison are also safe with 69 and 71 per cent of votes secured respectively.
There was also a 28.03 per cent vote against amending the constitution in relation to the holding of hybrid AGMs and 27.8 per cent voted against the renewal of takeover provisions in the constitution.
Given the last two were "special resolutions" and required 75 per cent shareholder approval to get through, they have failed to pass, and Lew has won these battles.
In a release to the ASX and the media, Myer attempted to downplay the shock losses, saying a "strong endorsement" was given to the Myer Board.
"Myer's shareholders have spoken and as Chairman of the company I am delighted with the clear mandate we have received to continue with the implementation of the New Myer strategy," says Chairman Garry Hounsell.
"It has never been more important that we get on with the job our shareholders have asked us to do. Myer Shareholders' wishes are clear, all parties should now respect the outcome."
Speaking to shareholders, Chairman of Myer Paul McClintock criticised the behaviour of Solomon Lew, who is Myer's largest shareholder via his Premier Investments group.
Lew has been on a constant barrage of the department store over the last few months, citing his disbelief in the group's ability to turn around its financials.
McClintock says that Lew's behaviour has alienated Myer from Premier Investments, and that Lew has only been acting in the best interests of Premier Investments and now the success of Myer.
"I believe that the roles of aggressor and partner are inconsistent, and that Premier shareholders will come to the view that this campaign has alienated one of their important business partners," says McClintock.
"Two weeks ago Premier Investments sent a letter to shareholders outlining a 'so called' strategy for Myer. Premier asked Myer shareholders to believe that it was a superior strategy for Myer."
"I believe it was not a strategy for Myer, it was a strategy for Premier to run Myer for the benefit of Premier."
McClintock says Lew's intentions were to grab board seats and takeover Myer in order to sell other Premier Investments assets in the department store.
"If Premier Investments wants to secure those benefits for their shareholders then they must pay a premium for that benefit," says McClintock.
Shareholders will vote at today's AGM about who will continue to sit on the Board of Myer, but McClintock says the decision is about whether the company will be given the chance to finish its "New Myer" turnaround strategy, which it is two out of five years through.
"You will have the opportunity to express your view later in the meeting and today you will decide with your votes whether the Company will be supported to finish the task of New Myer, or not," says McClintock.
"I am proud of what my Board and team has achieved in a tough retail market, and we know that there is more to be done and we seek your mandate to get on with the job."
Analysts suggest that the department store will make it through the AGM relatively unscathed, after gathering enough support to see off Lew's threats.
Influential proxy advisers CGI Glass Lewis and Ownership Matters have recommended that their institutional investor clients back Myer's board despite its poor performance. The Australian Shareholders' Association is also directing its votes in favour of all resolutions.
Shareholders will vote today about the future of Myer.
Shares in Myer Holdings Limited are trading down 0.423 per cent to $0.707 at 11.50am AEDT.
Business News Australia
Author: David Simmons