Whitehaven is staring down a push by Bell Rock to vote down the company’s pay report, and block the issue of incentive shares to managing director Paul Flynn.
But, in an application to the Takeover’s Panel on Wednesday – the day before the shareholder showdown in Sydney – Whitehaven has argued any shares voted by Bell Rock should be disregarded at the annual meeting as the UK hedge fund has failed to disclose its full interest in the Australian coal miner.
Proxy voting for the meeting closed at the end of last week and, while the company did not say it had been advised of the results of the initial count, Whitehaven sought interim orders from the panel seeking to exclude Bell Rock shares from the count.
Late on Wednesday the Takeover’s Panel said its acting President had declined to make the emergency orders ahead of the Whitehaven AGM – but further action is still possible.
“A sitting panel has not been appointed at this stage and no decision has been made whether to conduct proceedings,” the release said..
Bell Rock has previously told reporters and Whitehaven shareholders it speaks for about 4.8 per cent of the company’s shares and said on the weekend it believes it is steadily building support among Whitehaven’s other shareholders ahead of Thursday’s meeting.
In its application for intervention by the Takeover’s Panel, Whitehaven says the company believes Bell Rock’s total shareholding – including swaps and other derivative interests – is worth at least 11 per cent, which the hedge fund has failed to publicly disclose, seeking orders that any votes it casts should be disregarded on the day.
“At various times since May 2023 Bell Rock has represented to Whitehaven that it holds a combined physical and derivative interest in Whitehaven shares of approximately 11 per cent,” Whitehaven’s application says.
“Bell Rock has misled shareholders by omission by stating in a letter to Whitehaven shareholders on 12 October 2023 that it “manage[s] just under 5 per cent of WHC stock.”
Whitehaven said it was seeking orders forcing Bell Rock to disclose its full interest in Whitehaven shares, and that “unless such disclosure is made, the votes cast on the Whitehaven shares in which Bell Rock has a relevant interest be disregarded at Whitehaven’s upcoming annual general meeting”.
The Takeover’s Panel is yet to make a decision on the Whitehaven application.
Bell Rock has been campaigning since May for Whitehaven to abandon its $US3.2bn acquisition of BHP’s Daunia and Blackwater mines in Queensland, arguing the company’s cash war chest should instead be returned to shareholders.
The hedge fund has targeted Whitehaven’s remuneration report at the AGM, arguing changes made by the company last year – and supported by 92 per cent of Whitehaven shares voted at the meeting – incentivise risky acquisitions ahead of shareholder returns.
Bell Rock argues that Whitehaven’s decision to remove the traditional divide between short and long-term incentives – and instead run a “single incentive plan” (SIP) based on production metrics and earnings – offers an incentive to buy new production hubs rather than return cash to shareholders.
Influential proxy adviser ISS also recommended Whitehaven shareholders vote against the pay report last week.
In response to that argument, a spokesman for Whitehaven accused Bell Rock of seeking to mislead other shareholders.
“Our focus is on making sure all shareholders have access to accurate information around our remuneration and incentive structures. It is disappointing ISS and Bell Rock have chosen to reverse their previous support for our remuneration framework this year, especially against the backdrop of record financial performance and strong shareholder returns,” he said.
“All other large proxy advisers have indicated they are supportive of our remuneration report this year, which is unsurprising given they held that position last year when the SIP was first introduced and voted on. Extremely strong returns for shareholders during FY23 are the key driver of management remuneration outcomes, and reflect the principle that when shareholders do well, management should share in those benefits.”
Whitehaven shares close up 2.4 per cent at $7.77 on Wednesday.
