Endeavour share price higher amid board backflip on Wavish AGM vote

Endeavour shareholders will be allowed to vote on whether former Woolworths boss Bill Wavish can join the board.

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The Endeavour Group Ltd (ASX: EDV) share price is up 0.48% to $5.23 on Thursday amid the board caving to pressure this week and announcing it will allow a vote on director candidate Bill Wavish after all.

The Endeavour board previously told shareholders that if Wavish did not have the necessary regulatory approvals in place prior to the annual general meeting on 31 October, a vote would not be allowed.

The board said this was in line with its company constitution.

This position was met with fury from Endeavour's largest shareholder, Bruce Mathieson Snr, who together with Wavish, is highly critical of the current company management under chair Peter Hearl.

Such approvals often take months, and Mathieson threatened legal action if a vote did not proceed.

The Australian cited a stinging letter from Mathieson to the board last week.

In the letter, Mathieson pointed out that previous director appointments — including that of his own son and current director, Bruce Mathieson Jnr — were made before they had received their approvals.

Mathieson wrote:

This is preposterous as there is no realistic prospect that anyone could obtain all necessary regulatory approvals in such a short time frame.

This tactic could only be a cynical attempt to further entrench the insider's club on the Endeavour board – applying one standard for those in the club, and a different standard for those, like Bill, who are extremely well credentialed but are not insiders.

Mathieson threatened a legal challenge if the board did not allow a vote on Wavish's candidacy.

Endeavour shares higher on Thursday

Shareholders are now digesting this week's news that the board has backed down.

In a stunning backflip, the board announced on Tuesday it would allow a vote on Wavish after all.

It told investors that if the vote passed, it would be conditional upon Wavish receiving the approvals.

In a statement lodged with the ASX, the Endeavour board said:

Endeavour is concerned by the ongoing and significant disruption associated with this matter.

Following engagement with ASX and an associated determination received by Endeavour on this matter, Endeavour advises that the resolution will be considered by shareholders at its upcoming AGM.

'Extraordinary' intervention by ASX

The Australian Financial Review (AFR) quoted Mathieson describing the situation as "absolutely ridiculous" and that Hearl's position as chair is now "untenable".

He said he had "deep concern that a regulator has had to take the extraordinary step of intervening. It's incredibly disappointing, and the chairman should be ashamed".

Wavish said he was pleased "that common sense has prevailed" and thanked the ASX for its intervention.

He said:

With these distractions out of the way, my focus will be on talking to shareholders about the constructive contribution I can make to the Endeavour board, so we can all focus on getting Endeavour back on track.

Board recommends a vote against Wavish

Wavish remains a non-board-endorsed candidate.

In the notice of the AGM to shareholders last week, the board recommended they vote against Wavish.

This is despite Wavish's highly relevant and significant experience as a senior executive at Woolworths.

While working there between 1999 and 2004, Wavish oversaw the expansion of Dan Murphy's from a small Victorian operation into a national network and household name. He was also involved in the creation of BWS and led the company's acquisition of Mathieson's hotel business.

In his own statement in the AGM notice, Wavish told shareholders that under his guidance, Woolworths became the market leader in liquor sales and its network grew from 42 outlets to 574 in five years.

Mathieson calls the board a "disgrace". He highlights the $4.5 billion in market capitalisation lost over the past two years under the current management.

Endeavour share price snapshot

Endeavour shares have fallen 23% since September 2021.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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