Next week’s 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% of the company, appointed two new directors to the board on Wednesday night.
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.
At Wednesday night’s reconvened extraordinary general meeting (EGM), former SABMiller executive Mark Bowman and former Spur Corporation financial director Ronel van Dijk were voted onto the GPI board as nonexecutive directors.
Bowman and Van Dijk were two of four names nominated for election to the GPI board.
The collective consumer brands experience that Bowman and Van Dijk bring to the table is seen as a critical as GPI has battled for viability in its food segment, which includes Burger King, Dunkin’ and Baskin-Robbins.
Bowman and Van Dijk both received the support of almost 61% of shareholders registered to vote. The other two directors nominated by the shareholder activists, Cora Fernandez and Seapei Mafoyane, narrowly missed out on board seats with about 53% of GPI’s registered shareholders voting against their appointments.
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 both 52%.
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 outcomes of the EGM.
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”. Several GPI shareholders grumbled on Wednesday night that none of the directors put up for election to the board were present at the AGM.
Before voting at the EGM commenced, Abercrombie, who has served 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 taken because the sector was not a good long-term investment, with increased 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 hoped market confidence would be restored following the appointment of the new directors.
GPI COO Mohsin Tajbhai said Bowman and Van Dijk will add tremendous value and drive the business forward, particularly at Burger King.
