GPI appoints new director ahead of showdown with activist shareholders
Embattled empowerment group Grand Parade Investments (GPI) has made a key change to its board of directors just days ahead of a showdown with activist shareholders.
Last week GPI, which holds the master franchise for iconic fast food brand Burger King and minority stakes in cash-spinning gaming assets, announced that Mohsin Tajbhai has been appointed with immediate effect.
Tajbhai, a structural engineer, served as COO of manufacturing and properties at GPI before taking the role as group COO.
The appointment was made ahead of Wednesday’s reconvened extraordinary general meeting, where shareholders will be asked to vote on calls from a group of shareholder activists to appoint four nonexecutive directors with fast-moving consumer goods and strategic experience to the board.
The activists believe the board shakeup will provide oversight on corporate governance and capital allocation at GPI, which trades at a discount of more than 50% to its official sum-of-the-parts valuation.
The appointment of Tajbhai has been interpreted in various ways by market watchers. Some believe the appointment strengthens the GPI executive side of the boardroom against possible changes to the nonexecutives.
Others speculate that Tajbhai’s appointment could pave the way for GPI prime mover Hassen Adams, who serves as executive chairman, to take on a nonexecutive role.
Change at GPI is being expected by the market with the group’s shares rallying strongly last week. GPI’s share price gained 20% to R3 in strong volumes on rumours that a buyer is building a strategic position in the company.
Turnaround specialist Value Capital Partners (VCP) has been cited in market gossip. VCP has declined to comment on what it says is speculation.
Empowerment tycoon Iqbal Survé’s Sekunjalo Investment Holdings has also built a small position in GPI recently, although this has been described as a pure value opportunity rather than a strategic tilt.
The initial extraordinary general meeting, held on October 31, was adjourned when shareholders requested more time to mull the reasons for the calls for board changes by the activist shareholders.
Last week the JSE published these reasons in a Sens statement. The JSE said GPI did not adhere to a request in early November from shareholders to publish the reasons.