tim poole gets the boot?, page-5

Just a bit more info re hohimyee's news article...

Revealed: Institutional pressure forces Asciano board spill
ELIZABETH KNIGHT
September 3, 2009

Asciano is understood to be on the cusp of announcing a major board shake-up which will involve the appointment of three new directors, including the departure of its chairman, Tim Poole, who will be replaced by a former Orica chief executive, Malcolm Broomhead.

Broomhead will be joined by another well-seasoned businessman, Bob Edgar, who until recently was the deputy head of ANZ. The third incoming director, whose identity remains a mystery, is said to have once had a senior role at Woolworths.

It appears that the board upheaval was the result of agitation by shareholders and was seen as a way to underwrite the success of Asciano's $2.35 billion equity-raising in June. It is arguable that Asciano could not have raised these funds without sacrificing Poole or beefing up the board, but shareholders had long been dissatisfied with the company's previous strategy - including its level of gearing and its ill-fated move on the international pallet company Brambles.

Last month two of Asciano's most senior managers left the group. Ports boss Doug Schultz left unexpectedly while the chief operating officer, Don Telford, announced his retirement.

Smaller shareholders were also dismayed last week to find that Asciano's chief executive, Mark Rowsthorn, had received a bonus of almost $742,000 after reporting a loss for the year of $244 million after write-downs.

But it seems that Rowsthorn must have cut a deal that allowed him to escape the knife and retain his position under the enlarged board.

He may not be the most popular chief executive in town but since recapitalising Asciano, the company has become something of a sharemarket darling. Those who took stock in the issue have been well rewarded with significant share price gains.

The issue price of $1.10 was wildly oversubscribed and the volume of trading over the past couple of months suggests that some shareholders are sitting just under the disclosable threshold. The private equity group TPG, which had previously bid for some of its assets, was allocated 60 million shares in the placement and is thought to be holding close to 5 per cent.

The stock closed yesterday at $1.53, despite the fact that Rowsthorn was careful on the release of the company's full year results last week to hose down any excitement about near-term future earnings.

He said it was too early to tell whether a V-shaped recovery might be seen in the second half of the year.

Indeed, his comments were puzzling to his competitor Paul Little over at Toll Holdings, who was upbeat about the economic environment.

It seems that investors have made a rosier assessment of Asciano's ports and intermodal transport business.

Traditionally, Australian ports

volumes grow at 2½ times GDP and the intermodal business at twice GDP.

This provides quite a bit of leverage to an economic recovery. They may also believe that Rowsthorn can deliver on the $100 million in additional earnings (before interest, tax, depreciation and amortisation) from the company's move into the Queensland coal market. Like many other Australian corporates, Asciano is also targeting a raft of cost savings in the present financial year.

There could equally be another band of shareholders wondering whether TPG - or any of the other players that bid for bits of Asciano when a trade sale of assets was being contemplated - might see a takeover as a potential outcome. Normally, private equity players would not pursue any kind of hostile deals and are usually reluctant to even play in the listed space. However, given Asciano lifted its skirts during the trade sale process, interested players understand the business and have inspected the books.

The cloud on Asciano's horizon is the potential for a ports competitor in NSW. The Ports Minister, Joe Tripodi, is expected to open the game to a third stevedore, but the Government is at present in such a state of disarray that it is difficult to know whether this decision will be put off for a while.

On the topic of board renewal, Asciano is not the only corporate that has felt gentle pressure from investors to churn through directors. Charles Macek is the latest of the old guard at Telstra to announce he is pulling up stumps. Investors, most particularly the Future Fund, had already made their position clear on its views of Telstra governance, having seen off the former chairman, Don McGauchie. But it was also looking for some ongoing changes and the retirement of Macek appears to fit this objective pretty neatly.

http://business.smh.com.au/business/revealed-institutional-pressure-forces-asciano-board-spill-20090902-f8hd.html