Cromwell and ARA are battling it out over a seat at the Board. ARA, Cromwell's largest shareholder has nominated Gary Weiss for a seat at the board, to be voted on by shareholders at their annual meeting on November 28.
ARA, who holds a 23.7 per cent stake in Cromwell, has sent a pre-filled Proxy form to all security holders urging them to vote in favour of appointing Gary Weiss, however Cromwell have responded with a letter to all unit holders urging them to ignore the proposal.
ARA has attacked Cromwell over its strategy and performance, accusing it of having "an appalling track record of investment in overseas markets" and taking a risky bet through its acquisition of Polish retail assets, which analysts have since responded to in downgrading the stock.
According to Cromwell;
- ARA is a direct competitor to Cromwell in Australia and Europe
- As a nominee of a competitor, Dr Weiss is conflicted from participating in important Cromwell Board deliberations and sensitive commercial discussions. He is also heavily overcommitted with many other publicly listed directorships and responsibilities and his skills do not add to the skills on the Cromwell Board
- ARA is pursuing its own interests and maximising value for its own investors, not for all Cromwell securityholders
- ARA has agitated through the media and sought to disrupt and exert influence over Cromwell’s strategy and operations in a way that’s value destructive to securityholders
- ARA’s actions and conduct point to an attempt to ‘takeover by stealth’ without paying Cromwell securityholders a control premium.
To consider the matter raised by ARA, the Cromwell Board has established an independent committee but retains its recommendation against voting to appoint Gary Weiss to the board.
David Blight, the Australian head of ARA, stepped down from the Cromwell Board in July after the relationship with Cromwell's Paul Weightman broke down.