8 questions asked at 2022 Carsales AGM

December 24, 2022

Here is the test of the 8 questions asked at the 2022 Carsales hybrid AGM held on October 28. Were read out in full but no webcast archive provided so summarised answers are a bit fuzzy.

1. A question for both the chair and CEO to address. Why did you ditch the PAITREO capital raising structure adopted with the 2021 raise and instead go with a non-renounceable this year where retail investors were banned from applying for any additional shares, guaranteeing a profitable in the money shortfall for the under-writers and their unknown institutional sub-underwriters? On reflection, do you now agree this was a mistake and who should take a majority of the blame: management or the board?

Chair: next time will do a PAITREO or allow overs on the ANREO.

2. Thank you for disclosing the proxies to the ASX 90 minutes before the AGM commenced. Well done on receiving strong support for all resolutions but the biggest protest was 12% against Kim Anderson's re-election. What drove that? Did one of the proxy advisers recommend against and what was the rationale?

Answer: Yes, chair said ISS recommended against based on tenure and they wouldn't take a meeting to discuss the issue.

3. A question for Kim Anderson. When Kim voted in favour of launching the $1.207 billion non-renounceable 1-for-4.16 share offer at $17.75 earlier this year, was she aware that your 19,000 retail shareholders were banned from applying for additional shares when this is standard practice with non-renounceable offers by ASX300 companies. Was she expecting that only 8,000 of your shareholders would act rationally and participate in the $362 million retail offer by taking up their rights, either partially or in full. What does she think about the fact that the two Wall Street under-writers and their sub-underwriting clients made more than $10 million in profits from the entirely predictable retail apathy and non-participation, in addition to the $24 million fee they were paid to under-write the offer? Will she apologise for this dreadful treatment of retail shareholders?

Answer: chair Pat O'Sullivan batted this away.

4. A question for David Wiadrowski when dealing with his re-election Goldman Sachs and JP Morgan were paid $24 million by all shareholders to under-write this year's $1.2 billion capital raise. Can David explain how they were chosen? Was there a tender process and how involved was the board? Based on the discussion at today's meeting, does David now recognise that this structure directly benefitted the Wall Street under-writers at the expense of 11,000 retail shareholders who didn't participate and were diluted without compensation. Will he commit to initiating a board discussion on whether Carsales should launch a discounted Share Purchase Plan as a specific make-good gesture for the retail investors who were badly diluted as a class by the actions and structuring of their directors, who followed the self-serving advice of global self-interested investment banks.

Answer: chair Pat O'Sullivan batted this away. Watch video of question being asked via Twitter.

5. Given the interesting discussions across a range of topics today, including Cameron's LTI grant, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website? The likes of Nine, AGL, ASX, ANZ, Domino's and Lend Lease all produced their 1st AGM transcripts in 2021. Will you follow suit today? This is something Insurance Australia Group has been doing since 2003 so it is not new or innovative. Courts produce transcripts as a matter of course, as do parliaments in the form of Hansard.

Answer: No. And they didn't even publish an archive of the webcast.

When disclosing the outcome of voting on all resolutions today, could you please advise the ASX how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative adopted by the likes of Metcash, Altium and Dexus last year and Webjet and Tabcorp so far this AGM season. You commendably agreed to disclose that only 8000 of your 19,000 shareholders participated in this year's capital raise, so this disclosure of retail turnout and directed voting today is just an extension of this.

Answer: No.

7. Well done to Kim for contributing to the fabulous performance of Carsales during her 12 years on the board. The only blemish was this year's capital raising structure but at least the deal has clearly added value overall, as the chair pointed out earlier. Does Kim agree it was foolish of CVC to sell their controlling stake in Carsales for less than $5 a share almost a decade ago and that PBL Media would not have gone broke if CVC had retained its shareholding? Regarding tenure, is this going to be Kim's last 3 year term and what does she believe have been the company's 3 best moves during her 12 years on the board?

Answer: some insightful comments where she mentioned strong embrace of technology, succession management between founder Greg Roebuck and Cameron McIntyre and intense due diligence ahead of full acquisitions.

8. Our two founders Greg Roebuck and Wal P are both legends. Are the current directors and executives still in regular touch with both of them, tapping into their expertise and celebrating the great global success of this business.

Answer: Yes, we still all catch up regularly.