Abano – Hutson & Reeves adopted a flawed strategy

Peter Hutson and James Reeves were big losers at Friday’s Abano Healthcare meeting.

The activist investors are going backwards in their attempt to remove Chairman Trevor Janes.

The voting figures show that Janes more than doubled his support compared with last year’s annual meeting whereas Hutson and Reeves received less support than they did last year.

Voting to remove Abano Chairman Trevor Janes           

Shareholder participation was much higher at last week’s meeting with 82.5% of total votes cast compared with 52.6% at November’s annual meeting.

In the intervening period period Hutson and Reeves raised their combined holding from 3,771,252 shares to 3,811,664 shares or 18.6% of the company.

Thus, they received only 144,289 additional shares in support of their resolution to remove Janes at the latest meeting compared with 925,917 shares in November.

Hutson and Reeves seemed to lose support as their campaign progressed.

On May 2 SuperLife director Michael Chamberlain told Radio New Zealand that he would vote his shares in support of Hutson and Reeves for the removal of Janes. SuperLife, which owns about 4% of Abano, reversed this decision and either voted for Janes or didn’t vote.

Shareholder activism is an important part of the corporate scene. However Hutson and Reeves’ execution was extremely poor.

They failed to use the opportunity to include a 1,000 word argument in favour of their resolution in Abano’s notice of meeting and their personal attacks on Janes did not attract much shareholder support.

They now need to give the Abano board some space and if they want to have a role in the company’s future they will have to take a constructive, rather than a negative, approach.

Brian Gaynor

Disclosure of interests: Milford Asset Management holds Abano Healthcare shares on behalf of clients and voted in support of Trevor Janes at both meetings.