Renaissance board bickers ahead of AGMMarch 25 - 10am
Renaissance has sent a letter to shareholders ahead of it’s AGM this Thursday, requiring their “prompt attention” regarding the re-election of directors.
Urging all shareholders to attend, the Renaissance board drew investor attention to the AGM last year when two proxy votes were presented against the re-election of Richard Ebbett and Ron Halls as directors.
“The proxy votes were presented, without any prior discussion, the day before the AGM. Neither of the proxy holders spoke at the meeting so shareholders were not given the reason for their stance,” said the Renaissance directors, made up of Colin Giffney, Ron Halls, Richard Ebbett and Mal Thompson.
“From subsequent discussions your board understands the dissenting votes reflected dissatisfaction with “historic performance” of the company although this doesn’t explain the vote against Ron Halls, who had joined the board just two months beforehand.
“If that proxy vote had succeeded, the Renaissance board would have been inquorate.”
Essentially meaning that Renaissance would be unable to make any decisions regarding the business until it had appointed two new directors, the directors continued, warning:
“It could well take some time to find appropriate, qualified people, who are willing to take up that role.
“Shareholders would have had no say in this process. In the event the standing directors were narrowly elected.
“At the time Renaissance was beholden to its bankers and Apple, its major supplier. The loss of their confidence and support would have been disastrous for all shareholders.”
This year however, Clive Lewis, a former executive director of the company and one of last year’s dissenting proxy holders (with a 4.9% vote), has nominated Robert Bijl to be a director.
The directors also claimed that Nicki Wood, the widow of Murray Wood, a former director who died in the Christchurch earthquake, will support Bijl in his bid to join the board – she currently controls 13.9% of the shares.
We understand that Nicki Wood will support Robert.
“From discussions around Robert Bijl’s nomination this year, we have been led to believe that the same two shareholders will again vote against both directors, who are up for re-election, namely Colin Giffney and Mal Thompson,” Renaissance said.
“They have been soliciting support for their approach from shareholders. If Lewis and Bijl/Wood vote in this way, Renaissance could again be inquorate, or require another independent director.
“It has the potential to lead to a dysfunctional and divided board and this cannot be in shareholders’ best interests.”
Renaissance initiated a ‘strategic review’ in September last year, where the board recognised the company’s vulnerability to takeover and a share price that did not reflect underlying value.
The review, being undertaken in conjunction with Grant Samuel, has considered many alternative proposals according to the board, who told investors:
“This AGM is being held on the last day that it can be under statute. We delayed the date as long as we could, hoping that proposals arising from the ‘strategic review’ would have been sufficiently advanced to be put to shareholders.
“This has not and will not happen before next week’s meeting.
“The strategic review is all about maximising shareholder value from our two remaining businesses, whether under existing ownership or in conjunction with other parties.
“Negotiations are at a very sensitive stage. We hope to be in a position 2 to 4 weeks after the AGM to put some concrete proposals to shareholders.
“If these sensitive negotiations are disrupted by the removal of key directors with all that this implies the ensuing loss of shareholder value could be considerable.”
Drawing the letter to a close, the directors unanimously agreed it was in the shareholders’ best interests to see the current course being pursued under the strategic review through to its conclusion, and that this will be derailed if those directors up for re-election are not retained.
Director Giffney also expressed his desire to stand down at an appropriate time, accepting that with the above process underway, a process he is leading, the AGM is not the right time.
The board said Giffney will retire as soon as shareholders have had a chance to vote on specific recommendations, when at that time the director requirements for the company going forward will be clearer and an orderly transition to a new board can be made.
“We invited Robert Bijl to join the board of Renaissance in mid-2011,” Renaissance continued. “He declined.
“Obviously we were happy at that time to see Robert as a director and while some of the actions since have been difficult to understand we believe it is in the best interests of the Company for him to join the existing board.
“If we can get resolution of what the significant shareholders want, it might help the Company move forward.”
“Renaissance is not owned or controlled by the small number of significant shareholders. Other shareholders hold 60% to 70% of the shares. It is time to have your say.”
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