PPC's chair pulls a fast one on the activists

Bobby Godsell's decision to withdraw from the nominees for the "new board" of PPC dismantles the pretence that the behind-the-scenes deal to scrap this week's special shareholders meeting was a "compromise".

The shareholders meeting was called by PPC shareholders Foord and Vizio Capital, and was meant to be held on Monday to elect an entirely new board.

But the meeting was cancelled at the last minute as a "compromise deal" was apparently struck between shareholder activists and the current board, led by chairman Bheki Sibiya.

Godsell is now the third of Foord's six nominees to withdraw. The only Foord nominees left are Trix Coetzer, Peter Nelson and Keshan Pillay.

It is now apparent that Sibiya and the Public Investment Corporation (PIC) outmaneuvered the activist shareholders, securing the outcome they wanted ahead of a possible merger with PPC rival Afrisam.

At the AGM in January, PPC shareholders will get to vote on the election of an additional six directors to the board - a list that now looks far more anaemic than it did on Monday.

Foord's Daryll Owen said that once it became apparent that the PIC and Lazard Asset Management were going to vote against the first resolution to remove the entire board, it became evident that Foord would lose the battle to replace the current board with a "functional board".

The PIC holds 12.75% of PPC and Lazard has a 13% shareholding.

Although their combined 25.75% was short of the 50% needed to block the resolution, their stance could have influenced other shareholders.

What is unclear is whether any of the shareholders - other than the PIC - were aware of the pending proposal to merge PPC and Afrisam.

The PIC is a 66% shareholder in Afrisam. Given that this merger has been discussed at PPC board level for more than four years, it appears unlikely that the PIC was not aware of it. The PIC did not respond to requests for comment.

The PIC this week announced Daniel Matjila as its new CEO. The PIC's potential conflict of interest also presents difficulties for the competition authorities, who have already imposed restrictions on the PIC's involvement in PPC's management.