Before last Friday, I hadn’t been to an AGM of car parts manufacturer Pacifica since 2000, when former BHP chairman Jerry Ellis jokingly suggested I’d need to buy one of the company’s unbreakable security doors if such impertinent questions of business leaders was going to continue.

The company’s new German chairman certainly didn’t seem to enjoy some lively exchanges on Friday that only happened because a media appearance on Channel Ten’s 9am With David and Kim finished just minutes before the Pacifica AGM started a few metres from the Channel Ten front door in Melbourne’s Como Centre.

Pacifica should no longer be listed but for the fact Lazard and NAB inexplicably refused to accept a recent $2.20-a-share takeover offer from German manufacturing giant Bosch for their combined 19.54% stake. The word “morons” was muttered a couple of times over tea and bickies because the AGM was told Pacifica is headed for a loss this year, the shares are back to $1.77 and there’s little prospect of a dividend.

All of this made for rich pickings up against Peter Delhey, a resident of Stuttgart not used to public engagement given that Bosch is an unlisted company owned by a charitable trust that turns over 45 billion euros a year.

I asked Peter all sorts of things, ranging from the cost of the takeover, restructuring, relations with the old management, processes to look after minority shareholders and the company’s response to climate change.

He handled it all pretty well, except for the stony silence when asked to present his outlook before general questions were over. The tactic became clear when the outlook revealed Peter was replacing John MacKenzie as CEO and the company was headed for a shock loss this year. Oh dear.

The old Pacifica management have certainly helped themselves to some tidy sums. There were $800,000 in retention payments paid last year and then they also picked up $6 million from performance shares that were crystalised by the “change of control” provisions and sold into the Bosch offer.

The takeover ended up costing almost $20 million pre-tax, including a $4 million success fee to UBS, even though Bosch only landed 75.47% of the company.

Lazard appeared to vote against the re-election of Bosch representative Guenther Plapp but there seems to be sod-all communication between the company and the recalcitrant fund managers.

Whilst Solly Lew has been richly rewarded by holding out for a second higher offer from the private equity boys who now control retailer Colorado, the same won’t happen any time soon at Pacifica given the hard times ahead.

Peter Fray

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Peter Fray
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