Barrenjoey analysts say Endeavour’s pubs have been a “low-return business” since 2009, but the company needs only “strategic tweaks”.
Barrenjoey analysts say while they have ‘some sympathy’ with disgruntled Endeavour shareholder Bruce Mathieson, his campaign ‘overshoots the mark’.
Analysts led by Tom Kierath say the Endeavour hotels business has largely been a low-returning business for the past 14 years, most of that period under the ownership ofMr Kierath and his team have cut their predictions for where they think Endeavour shares will be trading at in 12 months from $5.80 to $5.40, but have a “neutral” rating on the stock on the basis that a de-rating by investors because of poker machine regulatory risk has already occurred.
The Endeavour board has opposed the election of Mr Wavish. Endeavour’s chief executive is Steve Donohue. The boardroom stoush became public on September 27, with hostilities escalating as Mr Mathieson stepped up his efforts, spending millions of dollars to try to convince Endeavour’s 420,000 shareholders an overhaul was needed.Barrenjoey analysed each of Mr Mathieson’s eight major criticisms including claims that costs were out of control, the retail strategy was confused, and the balance sheet was weak.
The research note also said that a close examination of the hotels business since 2008-09 found that it was generally a “low-returning business”.