Stock Takes: Dinosaurs and show ponies

Bruce Sheppard says Sir Ron Brierley could go the way of the dinosaurs if he doesn't appreciate the power of shareholders. Photo / Supplied

Sir Ron Brierley's letter to John Hawkins, which labels the Shareholders Association "anonymous corporate busybodies" and "show ponies", has stirred the pot with long-time shareholder activist Bruce Sheppard.

Sheppard, who stepped down as chairman of the association last year to take up a role on the establishment board for the new super regulator, says Brierley's attitude shows just how out of touch he is with the evolution of capital markets.

"In the 60s through to the mid-90s the world was your oyster. The majority of your owners by value were disenfranchised from the process of business, and were relentlessly manipulated by boards and major shareholders, and they remained compliant and quiet based on the inherent trust that they had for people like you," Sheppard said in a letter to Brierley sent yesterday.

"Then almost spontaneously and almost the world over a few 'show ponies' start to yell and scream."

Sheppard says boards have changed the way they make decisions and how they communicate them to shareholders while small shareholders have banded together to become empowered owners. "Your choice is to work with this change or face extinction."

Sheppard, who has butted heads with Tony Gibbs, also criticises Brierley for turning on him. "It is interesting that you see this time at GPG as a time of 'madness', and it is telling that ... you turn on Tony Gibbs. He must be asking himself what does half a life time of service to you count for.

"Tony at least tried to work with the change that was occurring around him. It is also telling that you continue to be resistant to the change that is now upon you and that you remain disconnected from the environment in which you now operate."

WOUNDED BULL

Sir Ron Brierley's decision to hit out publicly at his former business partner Tony Gibbs, must show how much pain and frustration he is feeling about losing control of Guinness Peat Group.

For 20 years he and his coterie of mates have had near complete control over the investment company, despite it being publicly listed, and now it has been wrestled away under pressure from shareholders.

Brierley says he fears "we are entering a period of increasing madness at GPG". It must seem mad to him to lose control of a company in which he owns a stake. But other shareholders most surely won't agree.

The plan produced by the three independent directors appointed last year with the support of major New Zealand institutional investors and the Shareholders Association has been strongly applauded.

Sell down the assets and give money back - there's no long-term future for GPG in its present form. The corporate "king" has been told he no longer has much say over his country and it will now be disbanded.

Add speculation the independent directors have come down hard on Brierley in other ways, including stopping GPG from paying rent for apartments in London's Knightsbridge, it's probably no surprise he is throwing his toys out of the cot.

ABSENTEEISM

After all the hoo-ha over the annual general meeting being held in New Zealand, Stock Takes will be interested to see who actually turns up to the big event from GPG.

There are strong bets Brierley won't be there. He made a bold statement many years ago about never fronting up to another public shareholders meeting in New Zealand and has stuck to his word.

Fellow director Gary Weiss, who was seen to be the man driving last year's failed plan to split off the Australian assets into a separately listed company, is also expected to do a no-show.

The June meeting is widely expected to be held in Auckland not Ruatoria or Invercargill as joked about by Brierley in his letter to Shareholders Association chairman John Hawkins.

UNUSUAL ACTIVITY

Eyebrows have been raised at the level of share trading which took place the day before GPG announced its asset sell-down and capital return on February 11.

On February 10, 8.6 million shares traded, more than double and triple the amount of trades in the previous days.

There is some suspicion news of the announcement had begun to leak and that it should be investigated by the NZX.

An NZX spokeswoman says it can't comment on any specific cases but adds that, as part of its daily frontline surveillance, it tracks any "apparently unusual movements in trading on any security, and will routinely require an explanation from the company and/or market participants for any such activity prior to making a decision whether to refer this formally to the Securities Commission, which has the powers to investigate these matters."

If the NZX does issue a "Please Explain", the correspondence should be copied to the Commission.

GPG shares yesterday closed flat on 74c.

MYSTERIOUS DROP

Abano Healthcare says it doesn't know why its share price has fallen by more than 10 per cent in the past few weeks.

The dental and audiology business, which has fought off two takeover bids in the past few years, pre-empted a stock exchange price query yesterday by saying it was not aware of any material information that had not been disclosed to the market.

Abano's share price has fallen from a close price of $4.95 on February 3 of this year, to close at a year low of $4.40 on February 16.

Abano on Wednesday reported an underlying half year profit of $2.8 million for the six months to November 30, down from $3.4 million in the same prior period. Others are miffed as well.

Mint Asset Management's Shane Solly said Abano had had unusually high turnover but he couldn't see any reason for its share price to be down by so much.

"It could just be the old brokers' theory of more sellers than buyers."

Solly, who runs a portfolio which owns the shares, said the company had good long-term prospects.

"But some of that growth is probably a year out."

Abano shares closed up 15c on $4.55 yesterday.

NO ACTION

The first initial public offering in some time listed on the stock exchange yesterday but failed to spark any interest.

Broken Hill Prospecting, which is 21.7 per cent owned by Heritage Gold debuted on the market but by the end of the day not a single trade had taken place.

The company raised $4.5 million in its IPO, most from Australian investors.

The New Zealand market's other new listing this year Building Society Holdings has been on a roller coaster ride since its listing earlier this month.

Its price began trading around 88c before falling to 72c. Yesterday it closed on 82c.

The company, an amalgamation of Pyne Gould Corporation's Marac Finance, Southern Cross Building Society and CBS Canterbury, hopes to apply for a banking licence by mid-year.