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Proxy firms tell Bellamy's shareholders to vote against Jan Cameron

After months of denial Tasmanian entrepeneur Ms Cameron on Thursday filed a notice showing that her Bicheno Investments ...
After months of denial Tasmanian entrepeneur Ms Cameron on Thursday filed a notice showing that her Bicheno Investments is the biggest shareholder in troubled Bellamy's. David Rowe
Carrie LaFrenz
by Carrie LaFrenz

Three proxy advisory firms have unanimously recommended that Bellamy's Australia shareholders vote against Jan Cameron's Black Prince Private Foundation move to spill the board of the baby formula maker.

The recommendation is a major blow for Ms Cameron's campaign to remove four independent directors who she said has overseen a 67 per cent destruction in the company's value since last year.

An extraordinary meeting has been set for February 28.

Sources said the proxy firms were highly critical of Ms Cameron's opaque shareholding structure.

Feb 21/22 – First half results likely to be released.
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Anatomy of a crisis
Source: Bloomberg, Financial Review, company announcements | Graphic: Les Hewitt
Dec 2 Trading update concedes China sales for November 11 ‘Single’s Day’ promotion fell short of expectations. Analysts and investors criticise McBain’s evasive performance during a briefing call. Shares plunge 43%. Dec 6 Bellamy’s receives a letter from the ASX asking when it first became aware of the information behind its trading update. Dec 8 Company says board was given the information at an early morning board meeting on December 2. Dec 12 Shares placed in a trading halt. War room in the Melbourne office of law firm, Herbert Smith Freehills, now in full operation, as directors and management work through problems. Dec 14 Shares suspended. Non-executive directors Patria Mann, Laura Inman, Michael Wadley and Charles Sitch agree not to put out an announcement before they are “really sure”. Dec 21 Trading halt extended. Dec 30 Black Prince calls for a special general meeting to remove the four non-executive directors and replace them with original backer Jan Cameron and three of her associates.
Oct 19 Strong China results trumpeted at AGM, shareholders vote down McBain’s $1.38 million pay packet.
Aug 19 Bellamy’s announces record result for FY16, revenues in China up 331%. Aug 29 Chief executive Laura McBain and chairman Rob Woolley sell a combined $5.3 million in shares.
Jan 4 Chairman Rob Woolley says in a statement the move by rebel shareholders led by Cameron, is not in the best interests of shareholders. Jan 11 Company replaces McBain with acting CEO Andrew Cohen, and says the board has renegotiated a key supply contract with Fonterra. A detailed business update reveals slower-than-expected sales, increased inventory levels and shortfall payments owing to its suppliers. Jan 18 Black Prince, under pressure from the board, forced to disclose it is answerable to a charitable foundation set up by Cameron, even though she had previously denied any link. Jan 23 Second shareholder class action launched. Jan 24 McBain resigns from the board.
Nov 22 Directors ask management for an update on how November sales will affect revenue forecasts after a board meeting.
Bellamy’s Australia share price, daily ($)
Source: Bloomberg, Financial Review, company announcements
Aug 19, 2016 Bellamy’s announces record result for FY16, revenues in China up 331%. Aug 29 Chief executive Laura McBain and chairman Rob Woolley sell a combined $5.3 million in shares. Oct 19 Strong China results trumpeted at AGM, shareholders vote down McBain’s $1.38 million pay packet. Nov 22 Directors ask management for an update on how November sales will affect revenue forecasts after a board meeting. Dec 2 Trading update concedes China sales for November 11 ‘Single’s Day’ promotion fell short of expectations. Analysts and investors criticise McBain’s evasive performance during a briefing call. Shares plunge 43%. Dec 6 Bellamy’s receives a letter from the ASX asking when it first became aware of the information behind its trading update. Dec 8 Company says board was given the information at an early morning board meeting on December 2. Dec 12 Shares placed in a trading halt. War room in the Melbourne office of law firm, Herbert Smith Freehills, now in full operation, as directors and management work through problems. Dec 14 Shares suspended. Non-executive directors Patria Mann, Laura Inman, Michael Wadley and Charles Sitch agree not to put out an announcement before they are “really sure”. Dec 21 Suspension extended. Dec 30 Black Prince calls for a special general meeting to remove the four non-executive directors and replace them with original backer Jan Cameron and three of her associates. Jan 4, 2017 Chairman Rob Woolley says in a statement the move by rebel shareholders led by Cameron, is not in the best interests of shareholders. Jan 11 Company replaces McBain with acting CEO Andrew Cohen, and says the board has renegotiated a key supply contract with Fonterra. A detailed business update reveals slower-than-expected sales, increased inventory levels and shortfall payments owing to its suppliers. Jan 18 Black Prince, under pressure from the board, forced to disclose it is answerable to a charitable foundation set up by Cameron, even though she had previously denied any link. Jan 23 Second shareholder class action launched. Jan 24 McBain resigns from the board. Feb 21/22 – First half results likely to be released.
Australian Financial Review Interactive infographic
Interactive infographic by Les Hewitt

While all three firms Ownership Matters, ISS and Glass Lewis have recommend shareholders vote against the replacement of the incumbent board, ISS is recommending that shareholders vote in favour of adding Black Prince nominee Chan Wai-Chan to the current board.

Ownership Matters director Dean Paatsch said it was an easy 'no' recommendation.

"The board of Bellamys should accept some responsibility but its a big stretch to hand control to Jan Cameron without a premium. This an easy no (recommendation)."

Meanwhile, it is understood that the cooperate regulator has forced Ms Cameron to put a substantial shareholder notice out, to provide a clear picture to the market over her holding. 

After months of denial Tasmanian entrepreneur Ms Cameron on Thursday filed a notice showing she is controlling 17.67 per cent of the  troubled company via several entities: Bicheno Investments, Bollinger Investments and Elsie Cameron Foundation.

Previously Black Prince was listed as the biggest shareholder at 14.5 per cent. It was later revealed that Black Prince was controlled by Ms Cameron via her Elsie Cameron Foundation.

Ms Cameron said on her new website that "a fresh new Board, including true shareholder representation will benefit the company and ensure a strong shareholder focus".

Mr Paatsch added: "If there are associates that take her (Ms Cameron) beyond that 20 per cent, she would be forced to make a takeover bid for the company."