Corporate raider, Ariadne run by Dr Gary Weiss, has issued a notice of intention to call for an extraordinary general meeting in a bid to gain shareholder approval to appoint four directors to the Ardent Leisure board, and consequently gain control.
Ariadne owns 9.86 per cent, with Viburnum Funds, and has been seeking two seats at the table to push along changes within Ardent. Calling an EGM requires a stake in a company of at least 5 per cent.
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Thomas resigns as Ardent CEO
Deborah Thomas steps down as CEO of Ardent Leisure, the parent company of Dreamworld, six months after a ride tragedy claimed four lives at the theme park. Nine News
But only a day after Ardent announced that the board had fast-tracked Simon Kelly as the new chief executive to replace Deborah Thomas, Dr Weiss has called for a shareholder meeting to boost it to four seats.
Aside from Dr Weiss, Ariadne is looking to add Kevin Seymour to the board, along with Brad Richmond and Andrew Hedges, and has been agitating for change at the embattled Ardent group.
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"The recent sequence of announcements from Ardent illustrates the actions of a board in complete disarray; one that's out of touch with both the market and the company's owners," Dr Weiss said.
"We see this requisition as the beginning of a process of board renewal, with further changes to board composition in due course".
"It's very clear that the Ardent's downward earnings trajectory under its current board needs to be reversed. The company is in desperate need of experienced and qualified individuals who can fix the company's problems and restore shareholder wealth. That's why we took this step, which is just the beginning of a process of board renewal, with further changes to board composition in due course."
An Ardent spokesman said: "We are disappointed Ariadne have taken this step given we only met them last Thursday to discuss matters of strategy and governance, and we had not yet formed a view on their request for two board seats".
"Telling us they now have an intention to call a meeting to appoint four directors is completely unproductive and we would be very surprised if other Ardent shareholders thought it was appropriate for a less than 10 per cent shareholder to exert this level of influence over the company," the spokesman said.
Baillieu Holst, has upgraded the stock, with a price target of $2.50 (previously $2.01). They have rolled forward to the 2018 financial year valuation and continue to include a 10 per cent corporate appeal premium in setting the price target.
"From the outside it is hard to know what the agenda of Ariadne and the associated parties is, other than seeking Ardent board representation and to generate a profit on their recent investment," the broker says.
The board spill comes as Ardent Leisure's former chief executive, Deborah Thomas, says she is committed to working on the coronial inquiry into the deaths last October at the Dreamworld theme park on the Gold Coast, in her new role as a consultant to the company.
Ms Thomas told Fairfax Media, that given she knows the families involved, the authorities and the staff at Dreamworld, it gives continuity to the process.
"We don't have a date for the inquest, but I am committed to working with all the relevant people to provide consistency, through what will be a difficult time" Ms Thomas said.
"They know me and trust me and I want to work closely with the families, the staff at Dreamworld and the broader Gold Coast community who rely on the park for employment and tourism to the region."
Ms Thomas officially left Ardent Leisure on Friday after an executive shake up. Ms Thomas was due to hand over the reins to the new chief executive, Simon Kelly on July 1, but that was bought forward with Ms Thomas now employed as a consultant to the company.
"I am totally fine. There are challenges facing the company. When I joined it was at a difficult time and its difficult now," Ms Thomas said.
"But it is what's in the best interest of shareholders and Simon has the strategic and financial expertise to steer the business through its next phase."
That next phase will be the change of name to Main Event and the expansion of that business across North America.
Plans are also being reviewed for the land surrounding Dreamworld which could be redeveloped into residential, retail and a hotel.
In its third-quarter update, Ardent said during May, the theme park visitations were down 35.8 per cent, compared to a decline of 35.4 per cent in the previous corresponding period.
Ballieu Holst research says the Ardent Leisure share price, which closed up 2¢ to $2.14, continues to range trade with the continued overhang of sustained weak attendances at Dreamworld.
"As we now move into the winter months the importance of Dreamworld visitation becomes less relevant and we expect the market to focus on: the dominance of Main Event in the Ardent story post the upcoming divestment of the Marina Division and the virtual absence of debt post the looming receipt of $126m from the sale of the Marina Division," the broker says.
"There is also the outcome of the review of the Dreamworld Master Plan which could potentially include divestment either through rezoning and/or outright sale."
Baillieu Holst, said that despite still owning Dreamworld it is clear it is no longer a sacred cow within Ardent. As such, we see significant potential for corporate activity with Main Event as the focus."