Western Gate calls for transparency and will vote against resolutions at DIA General Meeting
June 25 2024 - 2:00AM
Business Wire
- Western Gate calls for transparency and value creation for all
shareholders, including minorities
- DIA’s valuation potential unrecognised – improved market
engagement would benefit all stakeholders
- Repeated offers of collaboration and request for minority
representative rejected
- Recent dilutive transactions only appear to have benefitted the
majority shareholder
- Request for Board to publish public responses to its
questions
- Western Gate to vote against conduct of business by the Board
of Directors at DIA General Meeting on 28 June
Ahead of the Annual Shareholder General Meeting (“GM”) of
Distribuidora Internacional de Alimentación, S.A. (“DIA” or the
“Company”), which is due to be held on 28 June 2024, Western Gate
Private Investments Limited (“Western Gate”), a long-term,
supportive shareholder of DIA, has again written to the Company’s
Board of Directors raising serious concerns around governance,
transparency and advocating for the protection of the Company’s
minority shareholders. DIA is legally required to provide a
response ahead of the General Meeting. The Company received Western
Gate’s letter on 13 June, and Western Gate is yet to receive a
response.
The letter Is a continuation of communications Western Gate has
sent the Board over the last few months regarding these important
issues and as of 24 June 2024 there has been no adequate response.
The Board of Directors appear to be unconcerned about fostering
transparency and value creation for all shareholders.
Western Gate strongly believes in the value potential of DIA and
in the capabilities of its employees. In recent years, the Company
has made a significant effort to focus on its core business of
convenience stores and the sale of non-strategic assets. As a
result, the business has entered a new period of growth and in
their 2023 financial statements reported improvements in the
majority of markets in which they operate. However, despite this,
DIA continues to be significantly undervalued by the market and in
recent years the minority shareholders have been subjected to
continuous dilutive transactions that have only appear to have
benefitted the majority shareholder.
For the past three years, Western Gate has repeatedly called on
the Board to improve its engagement with the market and analysts to
increase awareness of DIA’s turnaround and valuation potential.
This has not transpired, and as a result DIA remains considerably
undervalued. In the letter, Western Gate requests clarification on
why repeated offers of collaboration and working alongside to DIA
to represent minority shareholders and raise the Company’s profile
have been rejected, and whether the Board plans to adopt a genuine
shareholder engagement policy, including steps they have taken to
encourage the involvement of minority shareholders.
As required by art. 13.4 of the Regulations of the General
Meeting of Shareholders of the Company, Western Gate have requested
the Board of Directors publish the letter as soon as possible on
the corporate website and include answers to the requests for
information and clarification and questions.
Francisco Jose Valente Hipolito dos Santos, Director of
Western Gate, said:
“It is incredibly disappointing that, despite improvements to
the Company’s financial performance, DIA continues to be
significantly undervalued by the market. In recent years, minority
shareholders have been subjected to continuous dilutive
transactions that have only appeared to benefit the majority
shareholder. Despite making a number of offers to collaborate to
improve minority shareholder representation and raise awareness of
DIA’s value potential for the benefit of all shareholders, we have
repeatedly rebuffed, with unsatisfactory responses.
“Following our most recent letter, we sincerely hope that as the
law obliges a response, the Board will do so with the utmost
honesty and professionalism. We also hope each of the directors
acts in the best common interest of all of the shareholders and not
just the majority shareholder.”
Western Gate’s voting intentions for the upcoming Annual General
Shareholder’s Meeting. They will be voting against the following
resolutions:
- Resolution 4 – Approval of the conduct of business by the Board
of Directors in fiscal year 2023.
- Resolution 12 – Ratification of the appointment by co-optation
and reappointment of Mr. Alberto Gavazzi as an external proprietary
director of the Company.
- Resolution 14 – Approval, until the holding of the Annual
Shareholders’ Meeting next year, of the reduction to fifteen days
of the period for calling Special Shareholders’ Meetings, in
accordance with Article 515 of the Capital Companies Law.
Western Gate plan to abstain from voting for the following
resolutions:
- Resolution 6 – Reappointment of Mr. José Wahnon Levy as an
independent director of the Company.
- Resolution 7 – Reappointment of Ms. Gloria Hernández García as
an independent director of the Company.
- Resolution 8 – Reappointment of Ms. Luisa Deplazes de Andrade
Delgado as an independent director of the Company.
- Resolution 9 – Reappointment of Mr. Vicente Trius Oliva as an
independent director of the Company.
- Resolution 10 – Reappointment of Mr. Sergio Antonio Ferreira
Dias as an external director of the Company.
- Resolution 11 – Reappointment of Mr. Marcelo Maia Tavares de
Araújo as an external director of the Company.
Notes to editors:
About Western Gate
Western Gate Private Investments Limited is an investment branch
belonging to the Family Office of Luis Amaral and invests in
private and listed companies principally in the retail and consumer
goods sector.
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