AFR article today. Interesting comments.
http://www.copyright link/technolog...rd-to-head-off-corporate-raid-20170124-gty5tg
1-Page appoints Merchant's MD to the board to head off corporate raid
Beleaguered recruitment tech company 1-Page has appointed Merchant Funds Management managing director Andrew Chapman to its board in an attempt to halt the fund's hostile management overthrow.
The move follows two months of turmoil for former ASX darling 1-Page in which Merchant bought up a significant share of the business (9.52 per cent) with the intention to orchestrate a shareholder coup.
Merchant's plan, led by Mr Chapman, would have seen the chief executive and numerous board members removed and 1-Page turned into a shell for a backdoor listing of a different business.
The corporate raid in December resulted in 1-Page's chief executive and founder, Joanna Riley, stepping down from the role and Virginia Malley, Rusty Rueff and Joseph Bosch resigning from the board.
Former 1-Page chief executive Joanna Riley remains at the company.
Former 1-Page chief executive Joanna Riley remains at the company. Dominic Lorrimer
Former 1-Page chief financial officer, Peter Kent, who only joined the company on December 6, has since taken on the top job, bringing with him a track record of turning around struggling companies.
Mr Kent told The Australian Financial Review the board moves would see the Silicon Valley-based tech business remain the focus of the listed entity, and predicted it could win back investors, who had previously clamoured to buy into the company.
"The changes to the board ... and the appointment of Andrew were the result of a negotiated settlement and that has enabled us to move the board from seven people down to five, and allowed us to avoid a costly proxy fight on both sides." Mr Kent said
"As the chairman, John Fennelly, has said, the board continues to support and is enthusiastic about the company's focus on providing talent-acquisition technology, removing the human recruiter from the equation."
The arrival of 1-Page as the first example of an ambitious US tech startup to target Australian investors was initially a great success. In September 2015 its shares reached a high of $5.69, up a huge 2745 per cent up on its 20¢ issue price in less than a year, giving it a market capitalisation of $762.2 million.
However, it has since plummeted back to earth dramatically, with its shares trading at 19¢ and a market valuation of just under $30 million.
Despite Mr Kent's confidence that the appointment of Mr Chapman to the board has put an end to the overthrow plans, a source close to the matter said Mr Chapman would still look to execute change internally.
Mr Chapman refused to comment, but in December he told The Australian Financial Review he wanted to turn 1-Page into a shell and find a local company that "can use local dollars, employ Australian people".
Mr Chapman's big issues with 1-Page at the time were its cash burn rate of just under $1 million a month in operating expenses, and the erosion of shareholder value because of the company's significant share price fall in the past 18 months.
He also bemoaned that company management allegedly rarely travelled to Australia to talk to shareholders.
Mr Kent said his immediate focus was on tackling the sales momentum of the company and continuing to invest in its product. He also said shareholders could expect a clearer view on management's thinking.
"I'm a true believer in transparency and there will be a focus on being more transparent and more communicative," he said.
"My priorities for the year really are to bring alignment back to the various interests in the company, be those shareholders, the board, management or employees and to return to the factors of building a great business and value for shareholders. You do that through accelerating sales momentum and disciplined expense optimisation."
While Joanna Riley stepped down from the chief executive's role, she remains at the company and Mr Kent said they had formed a "management partnership", with Ms Riley focusing more on customer development and product rather than the day-to-day running of the company.
The company has also shifted to a software-as-a-service revenue model, which Mr Kent said provides it with greater visibility over its revenue
Prior to joining 1-Page Mr Kent held executive roles at firms such as high-frequency traders Eladian Partners, Liquid Holdings Group and was the chief financial officer of Automated Trading Desk, which sold to Citigroup for $US680 million in 2007.
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