Tommorrow we address why PaperlinX is in a worse position than Fairfax.
The Australian Financial Review reports the PaperlinX board met on Tuesday, June 19. Oh to have been a fly on the wall.
In a polite understatement, the AFR says: "Pressure is mounting on the board from major shareholders, particularly Allan Gray [formerly Orbis and holding 18.29%] to complete the strategic plan".
Allan Gray's MD, Simon Marais, has enjoyed considerable success pressuring boards in recent times, see Simon Marais: CEO slayer. This is an excellent read and gives hope to PaperlinX investors.
The strategic plan is just one of many issues on an otherwise long agenda at PaperlinX. Some others for consideration in the next 10 days to June 30 include:
PaperlinX will be forced to declare its position on Mike McConnell. Someone at PaperlinX must mistakenly think that compliance with the Constitution is optional. SuX isn't the only person with strong views on this important issue of governance.
Toby Marchant to announce his resignation earlier than planned.
Only today has this become clearer to suX. Previously we've opined:
- Vacating Milton Keynes must have been a terrible loss of face for Toby Marchant if you recall what he said about it at EGM1;
- Terminating long serving mates must have been a blow to his ego, and lessens his authority over those mates still remaining; and
- Rumours about a September departure are strong in Northampton. SuX has heard of an unofficial "book" being run on the date;
Simon Marais is on the record calling for Toby Marchant's scalp.
Recall this report in LeadingCompany on the Monday following EGM1, see here.
Brief extract: Orbis Investment Management, the biggest shareholder in PaperlinX with 18.29%, was in favour of the proposal to change the chair.
The strategy was to remove the incumbent chief executive, Toby Marchant.
Simon Marais, the chief executive of Orbis, told LeadingCompany:
“We have spoken to a lot of current and ex-employees from senior roles in the company. The general opinion is that the CEO is not the right person for the role. I can’t back it up with any facts, other than, gee, the history is bad. But we can’t replace the CEO. We don’t vote on him. We only get to vote on the board.”
Nothing has happened at PaperlinX since then to change this fundamental view; however Simon Marais has enjoyed a number of high profile wins since then and is currently being courted by the media about Gina Rinehart and Fairfax where he has a 8-9% shareholding.
What happened today to make Toby Marchant's retirement so certain? Regular readers will recall that it's important to:
The solicitors requested that the letter not be published. I won't be publishing it because it's about Marchant and me, and this blog is about PaperlinX and PXUPA holders.
I can only conclude from the timing and content of this Concerns Notice that Toby Marchant is tidying up loose ends, at the Company's expense, before he departs.
I therefore expect Toby Marchant will soon be departing. Hopefully the board will formalise the announcement soon.
PaperlinX may soon run out of directors. With Marchant and McConnell almost certainly gone that leaves a constitutional minimum of three; Boon, Cattermole and Clarke.
By any measure Harry Boon's position must now be untenable following the Hastie Group debacle. Besides what suX and others consider to be an excessive board room workload, Harry Boon will be obliged to address the various post mortems associated with Hastie Group Limited (Administrators Appointed).
Surely someone from Tatts Group or Toll Holdings will tap him on the shoulder soon.
That would leave two directors!
Potential candidates for asset sales. See AFR article here.
It's not hard to see this being a bitterly divisive issue between management and key shareholders.
You don't have to be Einstein to work out the potential candidates for sale, and why opinions differ between the Marchant and Price camps.
If Marchant is departing, then his views are irrelevant. The board ought to take time on this topic as it may well be their last ever chance to determine the destiny of PaperlinX.
Good people can manage most assets. The wrong people have mismanaged PaperlinX's assets for nearly a decade.
The board needs to get the people right first.
PaperlinX is in a worse position than Fairfax. Tomorrow suX will publish some frightening parallels between Fairfax and PaperlinX. It isn't a pretty picture for PaperlinX investors or staff.