Just who is Andrew Love...the so called “independent director” who is also the Chairman of Lend Lease Primelife?
Does he have a “Jeckyll & Hyde” corporate personality that could cost the main rump of LLP shareholders, other than Lend Lease, literally millions of dollars?
At the very least he sends out some very strange and conflicting signals.
On the one hand, as Chairman and stated “independent director”, he is one of the “gang of three” who are recommending a current lowly offer from Lend Lease for all the shares they don’t presently own. They did so in the announcement dated 28 September 2009.
Direct Quote:
"The Independent Directors of LLP (Mr Andrew Love, Mr Ian Crow and Mr Gary Symons) (Independent Directors) unanimously recommend the Proposal in the absence of a superior proposal and subject to the Independent Expert concluding the Proposal is in the best interests of LLP Security holders. The Independent Directors have appointed independent financial and legal advisors to assist them in considering the Proposal."
End of Quote:
But later in the same announcement, it would appear that this independent gang of three have already made up their mind before they get their independent experts report:
Direct Quote:
" The Independent Directors will appoint an Independent Expert to consider the Proposal and provide an opinion on whether the Proposal is in the best interests of LLP Security holders, and fair and reasonable to, LLP Security holders who are not associated with LLC."
End of Quote:
Will appoint an Independent Expert?
Huh?
But, you’ve already made up your mind! You are unanimously recommending the proposal, remember?
Is this a case of a fellow accountant (Andrew Love) saying to the professional fraternity mates...I want a “security blanket” that backs up my recommendation which I have already given to the market?
In any event, we can only presume that this Andrew Love version (the negative one) has thrown in the towel.
Stripped of its professional speak and tact, it’s a case of just accept the offer, as it is marginally above net tangible assets, and we don’t have any other offer.
Their “roll over” acceptance of an offer from a bully big shareholder, without having an independent expert’s report as confirmation, hardly allows them to assume the mantle of “the independent shareholders friend” in a boardroom where the other two directors are from Lend Lease...as are the senior management of LLP.
These three are negotiating on behalf of a flock of loyal shareholders who have hung in there through the tough times and then, when the tide is about to turn are to be delivered “fully recommended” to a ruthless partner for the proverbial thirty pieces of silver!
These loyal shareholders are also the same group who have made their contribution towards the costs of re-establishing the business but, thanks to the actions of the gang of three, will probably not participate in any of the future benefits.
But, if you read the LLP annual presentation, dated September 2009, there is another Andrew Love. One who is positive, even confident about the future and proud of the back-breaking work that has been done at LLP.
Let me record a few direct comments...and trust me, they do not run contrary to the general theme of the entire report.
Direct Quote:
“The Group has confronted the financial crisis head on and has made significant progress in removing many of the constraints and complexities underlying the business. While the job is not completed yet, through focus and application material progress has been made.”
End of Quote:
Good back-slapping stuff and probably well deserved.
Plus, Andrew Love, our Jeckyll and Hyde Chairman, is bullish about the assets of LLP.
Direct Quote:
“The Group’s portfolio of assets are unique in terms of their scale, diversification, maturity and positioning within markets that will benefit from favourable demographic and urban development conditions going forward.”
End of Quote:
Are these the same assets which Love and his other independent directors are recommending that shareholders meekly handover to LLC for a value that doesn’t reflect what he has stated in his Chairman’s Report?
Yes they are.
Two widely differing opinions from the same person and all within the same calendar month!
To be fair, in his annual report, the Chairman (Andrew Love) let it be known that the re-building job was continuing, but isn’t that an ever on-going process at every business?
Direct Quote:
“Core strengths need to be enhanced in customer service, operating systems, marketing and sales as well as the refinement of skills required to meet the health care needs of our market in the most appropriate manner.
The actions taken by the Board over the last year, and briefly described below, are all aimed at positioning the Group to build on these strengths.”
End of Quote:
Andrew, the Chairman, then went on to list a number of triumphs recorded throughout the last financial year which put the company on a stronger footing.
Fair enough and good on you, directors and management, but don’t lose sight of the fact that the present shareholders paid the costs of implementing all these necessary changes.
Was this factored into the assessment of value when the independent directors made their recommendation?
It would appear not.
So, the hapless 57% of shareholders who have borne their share of the re-building costs will now no longer participate in the fruits...nor will they be compensated for their contribution.
But our gang of three have made yet another blunder...or maybe they were just out-negotiated in their tussles with LLC.
You see, the real future value of a retirement village complex to any developer is in its “development pipeline” and LLP has a substantial pipeline...but the independent directors have factored in no price premium to recognise this fact.
This is a substantial blunder that may cost the loyal shareholders dearly.
That is, unless shareholder power can get these issues corrected before this matter is rubber stamped under the weight of LLC influence and shareholder ignorance at just how badly their independent directors have represented and defended their position.
LLP Price at posting:
30.0¢ Sentiment: Hold Disclosure: Held
