THE BOTTOM LINE
GPI: Whopping great losses spur talk of board changes
Shareholders cheesed off about GPI’s cash-spinning gaming assets eaten up by cash-hungry food operations
Will the reconvened extraordinary general meeting of Grand Parade Investments (GPI) actually take place next week?
The originally scheduled meeting was adjourned on the request of some shareholders wanting more information on why a consortium of activists are doggedly pushing for changes to the long-serving GPI board.
Those reasons have now been published at the behest of the JSE and make for compelling reasons why new oversight is needed at board level in terms of capital allocation and corporate governance.
The ongoing losses at GPI’s food businesses, especially Burger King, are clearly worrying. The tone of the adjourned meeting showed just how angry community shareholders are around the exchange of a chunk of GPI’s cash-spinning gaming assets for the cash-hungry food operations.
Surely there must now be a fair chance that the GPI board will seek a compromise before the extraordinary general meeting in order to head off another confrontation with disgruntled shareholders?
Sister publication the Financial Mail observed this week there has been some big volume action in GPI’s shares, with rumours that turnaround specialists Value Capital Partners might be taking an interest. The FM also picked up the presence of empowerment tycoon Iqbal Survé’s Sekunjalo Investment Holdings on the share register – although Survé emphasised he was merely embarking on a "value play".
The vigorous share trading activity might point to behind-the-scenes developments. A possible outcome is that executive chairman Hassen Adams stands down and retains a role as a non-executive, with at least two of the directors nominated by activist shareholders securing board seats. Whatever transpires at GPI – which trades at a deep discount to its intrinsic value – now wine drinkers are spoilt for choice any change can only be for the better.