The second biggest shareholder in Federation Centres, superannuation giant Unisuper, has thrown its support behind the board and chairman of the $22 billion shopping centre empire, adding that it would not support any move that would destabilise it.
It comes as high-profile fund manager, Winston Sammut, has turned down a request to lead a shareholder rebellion at Federation Centres after the retail landlord controversially removed chief executive Steven Sewell on Monday.
Unisuper chief investment officer John Pearce said in a statement that it “was not privy to the decision made by the Federation board to replace Steven Sewell”. But stressed it had “full confidence” in the judgment of the directors and emphasised the “decision was unanimous”.
Mr Pearce added that Unisuper would not support any move that would destabilise the company.
Unisuper’s move may take the heat out of a nascent shareholder revolt.
Mr Sammut confirmed that he was approached by other fund managers yesterday to front a public campaign to unseat Federation chairman Peter Hay.
However after deliberating for a night, he has decided to decline the invitation and stressed it was time other institutional investors “stepped up and took a more active role”.
Unisuper has a 7.61 per cent stake in Federation, second only to John Gandel, who owns more than 17 per cent of the company.
Mr Sammut led an investor revolt against Mirvac’s controversial chairman, James MacKenzie, in 2012, after the group’s boss, Nick Collishaw, was unexpectedly dumped.
But despite the pledged support from a wide number of unitholders, Mr Sammut’s campaign failed to oust Mr MacKenzie and the chairman remained in his position for another year.
Unisuper’s intervention, and Mr Sammut’s decision to retreat from the coalface, come in the wake of an interview with Mr Gandel.
Mr Gandel said he supported the decision of the board and said smaller investors would find it difficult to spill the board.
Shares in the company -- which has a stake in 100 malls across Australia, including a half-share in Melbourne’s Chadstone Shopping Centre and Sydney’s Chatswood Chase -- plunged by 6.5 per cent in the following two days of trading on the Australian Securities Exchange.
This article first appeared in The Australian Business Review