Investment company Guinness Peat Group has again criticised the management of property company AV Jennings and called on the board to sell all of the company’s assets and the AV Jennings brand and return the proceeds to shareholders.
GPG, run by famous corporate raider Sir Ron Brierly is the second-largest shareholder in AV Jennings, with a 7.7% stake and has been a long-time critic of the company. It will move a resolution at AV Jennings’ annual general meeting, to be held next month, calling on shareholders to force the company to support it’s great sell-off strategy.
“Like many of you, GPG is dismayed at AVJ and believes it is time for shareholders to take decisive action, GPG wrote in a letter to investors.”
“At a share price of 42c, AVJ is currently trading at a 60% discount to its net tangible assets of $1.04 a share. In fact, AVJ shares are now trading at levels below its share price 14 years ago!”
It is the third year in a row that GPG has lodged a similar resolution and, not surprisingly, the board does not support the resolution.
Company spokesman Ted McDonnell says AV Jennings, like the rest of the property sector, has been affected by the global financial crisis. But he says that unlike many of its peers, AV Jennings has managed to avoid writedowns or breaching its debt covenants and has decreased its debt levels.
He also says AV Jennings shares have outperformed those of peers Becton, Sunland, Sockland and Devine.
The AV Jennings AGM will be held in Melbourne on 20 November.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
