‘Who’s running it?’ Owner of Dan Murphy’s and BWS faces questions about leadership limbo
By Jessica Yun
The sudden resignation of Dan Murphy’s and BWS owner Endeavour’s executive chairman has got investors wondering who’s in charge of the $7.2 billion company, with incoming chief executive Jayne Hrdlicka still five months away from starting her role.
Endeavour said on Monday that Ari Mervis, who held the dual responsibilities of chairman and chief executive, had left the business after “disagreements with the board”, raising concerns about the interim management of the company.
Endeavour executive chairman Ari Mervis has abruptly resigned, mere months after appointing Jayne Hrdlicka as CEO.Credit: Louise Kennerley
Hrdlicka, Virgin Australia’s former chief executive, is scheduled to take the helm at Endeavour on January 1, but has been consulting Endeavour’s board twice a week as it takes stock of the company’s performance across its various businesses, including 350 pubs and hotels and more than 1700 bottle shops.
Independent board director Duncan Makeig has stepped in as interim chairman while chief financial officer Kate Beattie will act as interim chief executive.
The board had held numerous discussions with Mervis across his tenure as executive chair, which is a “complex” role, Makeig said in a call to investors and analysts on Monday morning.
“The nature of those discussions have varied, and of course, the board and Ari have not always seen eye to eye completely on everything. There has been nothing that we would characterise as material in that regard,” Makeig said.
Duncan Makeig, the lead independent board director at Endeavour, has stepped in as interim chairman.Credit: Oscar Colman
“But I won’t go into this further. As you would expect, conversations that led to Ari’s resignation within the board stay confidential.”
In the investor call, Bank of America retail analyst David Errington said he had “heard good things” about Makeig but said there was a “distinct lack of accountability” at the company, pointing out there was now an interim chair, an interim CEO and an incoming CEO who was consulting two days a week.
“The company just seems to be rudderless, and it’s been rudderless for a little while. I’m just really concerned about where we’re at, at the moment, who’s running it,” Errington said, querying whether there were “too many external influences” affecting decision-making.
“Look, yes, there has been a lot of noise, and I can assure you it is not being run by any external parties who are not shareholders or otherwise,” Makeig responded, adding that he and the board were “absolutely accountable”.
A hunt has starte for Mervis’ replacement which the board hopes to conclude before the year ends.
“The board acknowledges Ari’s service to Endeavour group, a company we all agree has an irreplaceable asset base and unique opportunities in the future,” Makeig said in the ASX statement.
Mervis’ resignation doesn’t appear to have rattled shareholders, who sent Endeavour’s share price 3 per cent higher on Monday.
Some analysts are bracing for further change to come at the drinks and pubs operator, with Hrdlicka’s arrival signalling a potential “strategic reset”.
“In that context, we anticipate a period of ongoing disruption and turnover within the company over the coming 12 months,” Royal Bank of Canada Capital Markets analyst Michael Toner said in a note to clients after news of Mervis’ departure.
Hrdlicka’s appointment was announced in late April this year following the departure of long-time CEO Steve Donohue.
Her job will involve turning around Endeavour’s declining share price and business performance following a period of highly publicised board rumbles that resulted in the departure of former chairman Peter Hearl as well as board member Bruce Mathieson jr, the son of pubs billionaire Bruce Mathieson, the company’s largest shareholder.
“While we believe Endeavour has lost its way somewhat in recent years and the industry has faced cyclical and structural headwinds, it still has the core ingredients to be successful on a longer-term view,” Toner said in a note.
Former Woolworths CEO Roger Corbett, who engineered the deal to buy Dan Murphy’s for the supermarket giant at the time, has since become a vocal critic of Endeavour and previously told this masthead the company had “run down deplorably” since it floated to the ASX in mid-2021.
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