Asciano bid conflicts and ANZ tilt
February 2, 2010
Dear Mayne Reporters,
in today's edition we're full bottle on a host of governance issues that emerge with the $7.5 billion private equity bid for infrastructure giant Asciano, plus there's our little bit of additional pressure on ANZ's troubled and increasingly unpopular chairman Charlie Goode which might just help persuade him to go before this year's AGM without trying to crack more than 20 years of service.
Click through for all the details.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
in today's edition we're full bottle on a host of governance issues that emerge with the $7.5 billion private equity bid for infrastructure giant Asciano, plus there's our little bit of additional pressure on ANZ's troubled and increasingly unpopular chairman Charlie Goode which might just help persuade him to go before this year's AGM without trying to crack more than 20 years of service.
Click through for all the details.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
Governance issues aplenty in Asciano bid
Who said private equity was dead?
US private equity firm TPG, has today joined up with Global Infrastructure Partners, a joint venture between Credit Suisse and General Electric, and lobbed a $7.5 billion bid (including $4.4 billion debt) on the table to take control of Asciano, Australia's biggest rail operation and owner of the Patrick stevodoring business on the nation's ports.
When the Howard Goverrnment flogged Pacific National to Toll Holdings and Patrick for $1.17 billion in 2002, who would have thought that almost seven years later it would finish in the belly of the world's biggest private equity firm, a Swiss bank and America's most famous industrial conglomerate.
And when you consider Dubai World bought P&O for $6.5 billion in 2006, it means that Australia's stevedoring duopoly, which handles most goods through our ports, will probably finish up with the Asciano stalkers and an undemocratic middle eastern government.
Asciano have been pretty vague in their very brief statement and it took Business Spectator's Stephen Bartholomeusz to reveal that the consortium is being advised by Asciano's favourite financial house Macquarie, suggesting it may in fact be quite a friendly bid.
Private equity always throws up plenty of corporate governance issues and in the case of Asciano it is the shortage of genuinely independent and high callibre directors who could form the normal independent board committee (IBC) to take control of the process from a heavily conflicted management team.
Asciano has the smallest board of any company in the top 100 with just CEO Mark Rowsthorn, brother of Kath 'n Kim's Mark Rowsthorn, and three other directors.
Commsec lists former Hastings infrastructure group executive Tim Poole, 39, as being "executive chairman" whereas the Asciano website just says he is "chairman" and the others, Peter George and Chris Barlow are listed as "non-executive director".
Whatever the case, Poole is the youngest ASX100 chairman in the country who will be significantly challenged by this process and needs to establish his independence from management fast, even if the bid is friendly. (Poole was also the first mainlander to play against former French Open semi-finallist Richard Fromberg in an under 12 events at Heathmont Tennis Club in 1980. I was the second also got cleaned up by the shy Tasmanian.)
This takeover battle will pitch a couple of under 40-year old Melbourne University commerce alumni against each other because TPG Australia is headed up by Ben Gray, the son of former Tasmanian Premier Robin Gray. Gray probably knew Tim Poole from university days.
Melbourne has long been a small corporate scene where everyone knows each other and in putting together the Asciano board last year, Poole selected Chris Barlow, the CEO of the company which owns Melbourne Airport, to join him as a director. Hastings was a foundation investor in Melbourne Airport so it is all very cosy.
Whilst Poole and Barlow are relatively babes in the wood when it comes to big board seats, the only other independent Asciano director is a chap called Peter George who was the former head of strategy at Optus and is now executive chairman of Nylex where he is attempting to salvage something for Kerry Stokes from that particular mess.
On one reading, this looks like the Asciano board comprises four directors, all of whom have full-time executive responsibilities somewhere - two at Asciano itself and two elsewhere.
The institutional owners of Asciano - and it should be remembered that Rowsthorn only owns just over 10% - really should push to install another three genuinely independent directors to represent their interests through this process.
Rowsthorn might turn around and accept the offer and then be offered some form of new incentive deal by the private equity boys, along with the rest of the Asciano management team.
TPG got way too close to Geoff Dixon and the Qantas executive team during APA's takeover bid and we don't want to see that flawed process repeated.
US private equity firm TPG, has today joined up with Global Infrastructure Partners, a joint venture between Credit Suisse and General Electric, and lobbed a $7.5 billion bid (including $4.4 billion debt) on the table to take control of Asciano, Australia's biggest rail operation and owner of the Patrick stevodoring business on the nation's ports.
When the Howard Goverrnment flogged Pacific National to Toll Holdings and Patrick for $1.17 billion in 2002, who would have thought that almost seven years later it would finish in the belly of the world's biggest private equity firm, a Swiss bank and America's most famous industrial conglomerate.
And when you consider Dubai World bought P&O for $6.5 billion in 2006, it means that Australia's stevedoring duopoly, which handles most goods through our ports, will probably finish up with the Asciano stalkers and an undemocratic middle eastern government.
Asciano have been pretty vague in their very brief statement and it took Business Spectator's Stephen Bartholomeusz to reveal that the consortium is being advised by Asciano's favourite financial house Macquarie, suggesting it may in fact be quite a friendly bid.
Private equity always throws up plenty of corporate governance issues and in the case of Asciano it is the shortage of genuinely independent and high callibre directors who could form the normal independent board committee (IBC) to take control of the process from a heavily conflicted management team.
Asciano has the smallest board of any company in the top 100 with just CEO Mark Rowsthorn, brother of Kath 'n Kim's Mark Rowsthorn, and three other directors.
Commsec lists former Hastings infrastructure group executive Tim Poole, 39, as being "executive chairman" whereas the Asciano website just says he is "chairman" and the others, Peter George and Chris Barlow are listed as "non-executive director".
Whatever the case, Poole is the youngest ASX100 chairman in the country who will be significantly challenged by this process and needs to establish his independence from management fast, even if the bid is friendly. (Poole was also the first mainlander to play against former French Open semi-finallist Richard Fromberg in an under 12 events at Heathmont Tennis Club in 1980. I was the second also got cleaned up by the shy Tasmanian.)
This takeover battle will pitch a couple of under 40-year old Melbourne University commerce alumni against each other because TPG Australia is headed up by Ben Gray, the son of former Tasmanian Premier Robin Gray. Gray probably knew Tim Poole from university days.
Melbourne has long been a small corporate scene where everyone knows each other and in putting together the Asciano board last year, Poole selected Chris Barlow, the CEO of the company which owns Melbourne Airport, to join him as a director. Hastings was a foundation investor in Melbourne Airport so it is all very cosy.
Whilst Poole and Barlow are relatively babes in the wood when it comes to big board seats, the only other independent Asciano director is a chap called Peter George who was the former head of strategy at Optus and is now executive chairman of Nylex where he is attempting to salvage something for Kerry Stokes from that particular mess.
On one reading, this looks like the Asciano board comprises four directors, all of whom have full-time executive responsibilities somewhere - two at Asciano itself and two elsewhere.
The institutional owners of Asciano - and it should be remembered that Rowsthorn only owns just over 10% - really should push to install another three genuinely independent directors to represent their interests through this process.
Rowsthorn might turn around and accept the offer and then be offered some form of new incentive deal by the private equity boys, along with the rest of the Asciano management team.
TPG got way too close to Geoff Dixon and the Qantas executive team during APA's takeover bid and we don't want to see that flawed process repeated.