1998 Telegraph series - preview of week three

By Stephen Mayne
January 17, 2008

Week three of the annual meeting season starts with a full head today at Foster's Brewing in Melbourne. Business editor Stephen Mayne previews the action.

The board of another 10 of Australia's top 100 companies will front their shareholders in a busy week three of the 1998 annual meeting season.

The biggest meeting will almost certainly be held by the Commonwealth Bank in Melbourne on Thursday, which will easily eclipse the largest attendance of the season so far being 430 at MIM in Brisbane.

CBA shareholders have nothing to complain about based on the bank's profit and share price, so directors can expect more hostility from customers on issues like branch closures and surging fees. As a shareholder, I'll be asking a few questions at what promises to be a long meeting.

The Foster's annual meeting in Melbourne this morning should be a lively start to the week before shareholders are provided with the traditional servings of free beer. The company has admitted it was overly aggressive in China and taken a $167 million writedown. Other social and governance issues could arise as Foster's has opportunistically become one of Australia's biggest gambling companies with more than 5000 poker machines in its network of pubs.

It is also proposing a buyback of partly paid shares which will put money into the pockets of controversial former chairman John Elliott and the present CEO Ted Kunkel. However, its share price remains strong, CUB is still doing extremely well in Australia thanks to Victoria Bitter and poker machines, the wine division is powering along under Ray King and Foster's fetched an impressive $1.1 billion selling out of its Canadian joint venture.

The Australian Shareholders' Association plans to challenge the company to justify a proposed long term incentive plan for about 60 of its executives and will ask the plans to be adjourned until next year's meeting.

"It is up to the board to demonstrate that the share proposal does not result in excessive executive remuneration," ASA Victorian president Julian Stock said yesterday.

Foster's should get its largest attendance since the heady days under John Elliott with tens of thousands of BHP shareholders joining the beverage company's register after an entitlement offer last year.

Tabcorp's meeting in Melbourne tomorrow should be good spirited as the shares, floated at $2.25 in 1994, peaked at $10.15 last Thursday. Ross Wilson has made almost $30 million on his shares doing one of the easiest chief executive jobs in Australia. Tabcorp operates in one State where it has a monopoly on wagering business and a legislated duopoly on poker machines which it neither makes nor operates.

As Crown boss Lloyd Williams pointed out last week, Tabcorp simply has to find venues to operate its machines and give it 33 per cent of the player losses. Too easy.

Even so, I'll be raising questions about Mr Wilson's package, Tabcorp's continuing failure to close its pokies market share gap with rival Tattersalls and the perennial question about expanding into other gaming areas. So far, Tabcorp has wisely resisted any high priced takeovers.

After a restful week staying at the Hyatt Coolum, James Packer will be on display for the first time on Thursday in his new role as executive chairman of his father's flagship company, Publishing and Broadcasting Ltd. The company is usually sympathetically treated by shareholders, not unlike Kerry Stokes at Seven Network and Rupert Murdoch at News Corp.

However, issues like the option to buy into Foxtel, losses at its theme park joint venture Intencity and the aborted magazine merger with Time Warner may be raised.

Lend Lease is continuing with its uncommon practice of holdings its meeting at 7pm, causing deadlines difficulties for the media but allowing more shareholders to attend after work. After almost 30 years of profit rises and a share price at $35.10, outgoing chairman Stuart Hornery can expect a hero's farewell, but the appointment of Peter Willcox as his successor may raise some issues. Willcox headed BHP Petroleum when it made its spectacularly unsuccessful and much-heralded push into the Dai Hung oil venture off Vietnam, but in spite of this appears to be highly regarded in Lend Lease.

Hoyts directors can expect some heavy treatment from shareholders on Friday over its plunging share and troubles in America.

North Ltd will have to deal with the usual contingent of anti-uranium protestors at its meeting on Friday.

Two of Perth's more interesting companies, casino operator Burswood and the Orbital Engine Company, also meet with shareholders this week and will hopefully be asked by investors, if not my proxy, about their weak share prices.

Orbital founder Ralph Sarich amassed his $200 million forture selling Sarich shares at prices as high as $4, so he does not have much to complain about with his one remaining share worth just 66c on Friday.

Rene Rivkin will also be out in public today at the meeting of Abednego Nickel, which is presently the subject of a friendly $1 a share takeover bid from Anaconda Nickel. Rivkin was hoping to make a huge profit but will happily walk away from his last annual meeting with the company about $8 million in front on his investment.

The Australian Shareholders Association is planning another busy week across Australia, with representatives expected to ask questions at the following meetings: Commonwealth Bank, Lend Lease, North, Foster's Brewing, Tabcorp, Howard Smith, Biota, Newcrest and Pasminco.


TODAY: Burswood: Perth. Foster's Brewing: Melbourne. Normandy: Adelaide. Abednego Nickel: Sydney.
TOMORROW: Tabcorp, Ausdoc: Melbourne. Apollo Batteries: Sydney.
WEDNESDAY: Pasminco, Biota,: Melbourne. Howard Smith, Centennial Coal, Coates Hire: Sydney.
THURSDAY: Commonwealth Bank, Australian Hospital Care, Amrad Corp, Central Equity: Melbourne. Orbital: Perth. Publishing and Broadcasting, Lend Lease, MMI, Thakral, CIM Resources: Sydney.
FRIDAY: OPSM, Hoyts, Walker Corp, North: Sydney. Mobile Communications, Southern Cross Broadcasting: Melbourne.