Iress AGM, Origin bid and another 20 Rich Listers

February 2, 2010

Dear Mayne Reporters,

Iress Market Technology is one of those rare Australian IT success stories, so I was keen to get along to their AGM today to find out more about this $800 million company which provides software solutions to the financial services industry in Australia, New Zealand, South Africa, Canada and the US.

Unfortunately, I was 5 minutes late because the annual report said the AGM would be held at 385 Collins St, which doesn't exist. There were plenty of laughs about aspiring to a Collins Street address when I got into the Iress boardroom on level 18 of 385 Bourke Street.

The other blunder in the annual report was labelling the balance sheet on page 38 as 2006. We all know that companies use templates from previous years to produce results and annual reports but you've got to change the dates. As for the Collins St blunder, that was just bizarre.

The big news coming out of the AGM was chairman Neil Hamilton's admission that he would have problems granting largest shareholder ASX Ltd another board seat, given emerging conflict of interest issues. ASX increased its stake from 15% to 18% last November and is already $10 million down on that latest top-up, but well up overall.

The ASX was represented on the board by Angus Richards since Iress floated in 2000 due to the financial disasters engulfing former US parent Bridge Financial Services. However, Richards quit the ASX in 2006 and then finally left the Iress board this morning, leaving just three non-executive directors.

It seems that various Iress takeovers in recent years plus the emergence of competitors to the ASX has made the conflicts too great for a board seat. Not that the ASX has asked Hamilton about this, of course.

The hunt for new directors will now be on in earnest because Neil Hamilton also flagged the potential departure of himself and audit committee chief Tony Killen, a former Australasian boss of National Mutual, in the next couple of years because they have both been on the board since the float.

Hamilton admitted that his hands were full right now but the workload will surely drop next year given that Mt Gibson Mining, which he chairs, Insurance Australia Group and Programmed Maintenance Services are all in the process of being gobbled up by predators.

Given the stellar performance of Iress, I recommended that Hamilton stay on, especially as he's still a relatively youthful 55. The ten year rule is only a guide and why change a winning formula? Afterall, Maurice Newman chaired the ASX for 14 years.

The ASX relationship discussion took up about 20 minutes of the 45-minute meeting and one of the other 20 shareholders in the room also piped up with a question. David Gonski will be succeeding Maurice Newman as ASX chairman in October and we all know that he's a takeover freak, so don't be surprised if he tries to lob a bid at Iress.

I asked Hamilton about his relationship with Gonski and he said they'd met occasionally socially but there'd been no communication since Gonski's announced elevation to the ASX chair last year. He's anticipating a chat after the October transition.

Hamilton was indecisive on the question of whether there would be regulatory problems for an ASX bid, although I reckon there would be big protests given that Iress is providing much of the software for the competing AXE consortium which is attempting to launch against the ASX.

Cosy AGMs in board rooms are always chatty affairs and given that I didn't lob a single aggressive question and even the pay resolutions sailed through with at least 87% support from the proxies, we ended up having a mini-board meeting in the coffee enclave afterwards with Killen, Hamilton, CEO Peter Dunai and Deloitte auditor Sneza Pelusi.

The biggest brick bat I copped was Ms Pelusi pointing out I'd asked a question of her at the Timbercorp AGM earlier this year presuming she was "Mr Pelusi". Indeed, what can you say.

All up, it was a small AGM with some good debate that didn't warrant any brickbats. Well done to everyone involved in the success story that is Iress. There should be independent ASX lisetd companies like them.

Unfortunately, it will probably end up going the same way as Tower Software, Mincom, Hitwise, IWL and various other IT companies and get snapped up by bigger rivals or private equity.

The Origin sell down

The old British Gas has lobbed a $13 billion cash bid on Origin Energy as the global resources grab gathers pace. The Chinese government recently bought 1% of BP, so it will be interesting to see if they respond given Origin's emerging upstream assets.

Treasurer Wayne Swan should immediately adjust his budget forecasts because if BG's Origin bid succeeds, he'll be banking at least $1 billion of additional capital gains tax receipts.

Meanwhile, the old insider trading question around takeovers is worth another look. Origin shares jumped 20c to $10.47 yesterday continuing a recent share spike. Guess what I did? Yep, I sold 43 of my 53 Origin shares at $10.45 a pop in afternoon trade.

BG has offered $14.70 cash, so that's $170 left on the table from yesterday's premature sell-down. Oh well, at least I'll get $147 for the remaining 10.

Another 20 Rich Listers

I tried sorting through and filing a few recently arrived annual reports last night and picked out another 20 Mayne Report Rich Listers along the way:

Andrew Mohl: the former AMP CEO collected a tidy $6 million salary package in 2007 and walked out as the proud owner of 1.6 million shares, suggesting he is worth between $20-$30 million after five years running the place.

Craig Dunn: the new AMP CEO already owns more than $3 million worth of shares and was paid $2.7 million in 2007, which will rise significantly in 2008 as the top banana.

Peter Botten: the Sydney-based CEO of PNG registered Oilsearch has been earning good dollars since taking the top job in 1993 and collected a tidy $3.35 million in 2007.

Christopher Lee: one of the founders of accounting software group MYOB who has made a small fortune out of its success over the years and was able to retire in April 2007.

David Browne: executive chairman of newly listed stockbroker Tolhurst who owns more than $5 million worth of shares in the company, made plenty from his membership of the ASX and is the major shareholders in the Scotchman Hill winery.

Peter Reilly: the former managing director of business services group AUSDOC is now one of the largest shareholders in listed stockbroker Tolhurst.

Leigh Clifford: the former CEO of Rio Tinto collected $4 million in 2006 and $7.5 million in 2007, when he retired from the mining giant.

Graeme Cureton: A GPG executive director for many years who was paid 1.78 million pounds in 2007

Richard Davis: the CEO of death services company Invocare owns 1.3 million shares worth about $10 million and is paid $1.3 million a year.

Michael Grehan: former director of death services company Invocare who owned more than 1 million shares worth about $7 million when he resigned in February 2007.

Ned Montarello: CEO of Perth-based financial services technology company Thinksmart who floated the business in 2007 and still owns 13.7 million shares worth more than $10 million.

Gary Stafford: the managing director of wannabe iron ore miner Pan Australian Resources owns 11 million shares worth more than $10 million.

Dr Ralph Child: a former director of Pan Australian Resources who departed in June 2007 with 6.8 million shares which would be worth worth more than $7 million if still retained.

Sam Walsh: Rio Tinto's Perth-based iron-ore boss saw his pay rocket to a staggering $7.7 million in 2007 as record profits, huge Chinese demand and the BHP-Billiton takeover bid all worked in his favour.

Gary Weiss: a long-time right hand man to Sir Ron Brierley at corporate raider GPG who collected a very generous 2.6 million pounds in 2007 for his efforts with the company.

Kevin Moriarty: the executive chairman of Adelaide-based zind miner Terramin Resources owns 9 million shares worth more than $25 million.

David Paterson: a geologist and former stockbroker who made plenty from his ASX membership but has done even better from the 9.16 million shares he owns as a director of zinc miner Terramin Resources which are worth more than $25 million.

Alan Jennings: pops up on the Gazal Corporation top 20 with 2.5 million shares worth more than $6 million.

Chris Renwick: ran Rio Tinto's Perth-based iron ore division from 1997 until 2004 before becoming non-executive chairman of Coal & Allied where he built up a shareholding worth more than $3 million.

Antony Sage: has just emerged as a 6.4% shareholder in wannabe iron-ore producer Cape Lambert Iron.

That's all for now until tomorrow's update after the Alumina AGM where my board tilt is not looking like a great success at this point in time.

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.