CGI Glass Lewis advises against Mathieson-backed Endeavour candidate

Proxy advisory firm CGI Glass Lewis has advised clients against voting to elect Bill Wavish, the retail veteran championed by major Endeavour Group shareholder Bruce Mathieson snr, to the board of the liquor and gaming business.

Mathieson has led a sustained campaign over the past fortnight to add Wavish to the company’s board, outlining concerns about serious mismanagement at the Dan Murphy’s and ALH pubs operator, with Endeavour shares declining 16.2 per cent so far this year.

But on Friday, CGI Glass Lewis, the first proxy firm to advise investors on the battle, reviewed the claims made by the Mathieson camp about Endeavour’s performance and concluded that the company’s challenges were not because of entrenched long-term issues with the current management.

“Based on current available information, we believe those shortcomings are more likely to be owed to transitory factors as opposed to entrenched, long-term mismanagement by the company’s current leadership,” the group said in its report to shareholders.

The firm noted in its analysis that the dissident shareholder group had not explained why Wavish had declined to participate in Endeavour’s formal director search process, as well as observing that the main experience Wavish highlights of himself is about two decades old. This “might raise some questions among investors regarding his knowledge and expertise regarding more recent relevant corporate and industry trends”, the proxy adviser said.

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“We also note that two of Mr Wavish’s most recent relevant corporate directorships have resulted in a fair degree of subsequent public scrutiny,” the report notes, referencing Wavish’s roles at Myer and Dick Smith.

A prolonged public spat between the board of Endeavour and Mathieson snr, who holds a 15 per cent stake in the company, has played out through correspondence over the past fortnight which started when Mathieson first backed Wavish for the board last month.

The billionaire pub baron has been highly critical of Endeavour’s management team, led by chairman Peter Hearl and chief executive Steve Donohue, arguing that the group’s financial growth is weak and that the company lacks balance sheet discipline.