Every man and his dog with a social media account is commenting on the US election, and with theories on what the Trump win means for investors.

I am not making any changes to my positioning as a result or making any comments on this.

It did however make me ponder, given we are in AGM season now, the issue of whether shareholders bother to vote.

Unlike the government fines I usually get for being totally unaware a local council election was on, fortunately like in the US election, we are not forced to vote at shareholder meetings.
 

Having said that, part of me in a way wishes it was compulsory. In many instances, the company takes advantage of the apathy of small shareholders when it comes to voting, at the expense of such shareholders.

I have more time on my hands and take a more active role in managing my share investments than most do, but even I can suffer from such apathy and not get my votes in.

I am trying to avoid such apathy this November at least, so in recent days I have been noting some ASX companies where I shall likely try and make my vote count.

For whatever reasons, generally speaking, my portfolio will regularly be made up of quite a few somewhat “contrarian” investments.

It has its fair share of failings of course. When you talk to people about such holdings, the more they look at you with utter disinterest, or even disgust, I am increasingly these days getting a bit more confidence out of that. Perhaps it shows that anyone who has ever held it, has finished selling up by now!

Some of the holdings I have with AGMs coming up might fit in this sort of category.
 

Let’s take a quick look at some of them:

5G Networks Ltd & Tectonic Opportunities Fund what gives?

5G Networks Ltd (ASX: 5GN) – This AGM looks interesting to me now that Tectonic Opportunities Fund have accumulated near 10% of the company.

It is an unusual situation in that the shares have been trading around 14 cents, even though back in June the company proposed the sale of its main business and a 15c capital return. Since then, formalizing such a transaction has been delayed.

It is also unusual because of the sale price of the main business being just a cash price of $500k, with the assumption the acquirer is taking over certain liabilities. Also unusual because the buyer is entities associated with 5GN’s managing director.

Therefore supposedly the cash is already there to basically fund such a capital return, and the company continues to buy back its own shares since.

An independent board committee (IBC) was formed here to make sure this was all also in the best interest of shareholders other than the 5GN MD. The IBC engaged an advisor to conduct a process that may potentially seek out other bidders for the business. None were found after what seemingly was quite a quick process. Although I could not find many details about such “process”.

Like with the next stock I shall discuss, in this case it seems more intuitive to follow the likely thoughts of the activist shareholder Tectonic Opportunities Fund. Their interests appear thus far to be more aligned with most other shareholders.

Now I don’t know how this fund will necessarily vote at the AGM, but if they happen to vote FOR the remuneration report for example, the whole situation becomes even more unusual I think given their comments made a few months back! (they did not like the look of this proposed deal).

Last year’s AGM showed 23% against the remuneration report, thus narrowly avoiding a “strike”.

BIGTINCAN HOLDINGS FORAGER BOARD SPILL?

Bigtincan Holdings Ltd (ASX: BTH) –  In terms of the AGM coming up here, a good place to start rather than my rants are to check out the open letter from Forager Funds linked below:

Forager Funds | Time for change at Bigtincan

The BTH board’s scheme transaction that it has recommended referred to an implied equity valuation of 48c a share.

Despite the fact it has agreed terms with the acquirer, the shares still trade at circa 18c.

Sounds too good to be true right?

Sometimes it’s best to keep things simple in terms of deciding which way to vote.

A cynic might suggest the transaction is about mainly maintaining the status quo and prolonging the relevance of a board who was destined to be spilled.

The footnotes in such transactions often require a powerful magnifying glass to read, so I shall highlight one in particular regarding what the valuation is based on. “US$10 per Bigtincan Limited share price of Investcorpʼs US$12.5 million investment in Bigtincan Limited. There can be no assurance that Bigtincan Limited shares will trade at or above US$10 following completion of the transaction.

What are Forager’s motives with all this? Probably very similar to most other shareholders, maximize shareholder return with regard to the risks.

In the meantime, we are hearing crickets in regard to any potential consideration of an alternative 22c cash proposal.  Only that an update will be provide “in due course”, the trusty old favorite expression boards love to use at times.

Last year’s AGM saw the company achieve a first “strike” against the remuneration report. I intentionally use word “achieve”, because the voting results recorded such a high percentage against. Such a number I would have thought would be difficult to get even if you were trying your hardest to get a high number of shareholders against you. The number was close to 80% against.

TRIBECA GLOBAL NATURAL RESOURCES FUND NEEDS A CHANGE

Tribeca Global Natural Resources Ltd (ASX: TGF) – Another situation where the board here falls back on the old “update will be provided in due course” timeline.

We are almost 2.5 months now from when the Annual Report was released, with the chairperson quoting “However, it is reasonable that TGF shareholders question whether TGF’s current structure is in their best interests. Therefore, the Board has initiated a process to consider the merits of the LIC structure versus other structures and we will update shareholders with our findings in due course.”

With the AGM approaching on November 22, the silence is deafening. Assuming nothing changes (based off the history, this seems likely), makes it a pretty easy call how to vote on the remuneration report.

Given that months ago they had “initiated a process”, surely shareholders might like to know some details about this process, acknowledging of course that the process may take some time.

Is a “process”, simply another brief chat amongst board members to arrive at a conclusion like last year? i.e. no changes to be made based on no formal research provided to shareholders regarding potential liquidity in an open-ended conversion, and transaction / taxes costs that they admittedly continue not to investigate?

Ironically, when it comes to providing research, analysis, fresh ideas and conclusions for major changes in how other companies are run, Tribeca are not shy at all as I discussed below:

ACTIVIST INVESTOR TRIBECA TARGETS GLENCORE

Last year TGF’s AGM saw almost a 20% vote against the remuneration report.

VGI PARTNERS GLOBAL INVESTMENTS WHO ARE YOU – REGAL OR PGF?

VGI Partners Global Investments Ltd (ASX: VG1) – On a brighter note, this former dog has showed some bite in the last year and deserves more favorable voting come AGM time.

The problems with VG1 last year I highlighted many in the below post about a year ago.

IS LIC VG1 ASX ABOUT TO WIND UP OR CONVERT TO OPEN ENDED?

In a follow up post, I discussed some further potential solutions.

SHOULD PGF ASX TAKEOVER VG1 ASX?

Whilst not perfect, there has been some progress.

Finally, a LIC does a buyback in a meaningfully way. If certain biased LIC promoters still want to keep running with the myth that buybacks cannot work, at least they could acknowledge a couple of points. That in the last year this VG1 buyback has been meaningfully accretive to the NTA, potentially adding a few percent to performance in itself. It has also seen the stock become quite liquid.

We saw in March this year, the AFR run with the theory that PGF and VG1 might look at a merger of some sorts.

VGI Partners LIC trading frenzy

So what bridged the gap in NTA from circa 18% to 8% recently? Was it improved underlying stock picking from the refreshed VG1 team, buyback, speculation of a takeover,  a different marketing approach, consistent increased high dividend yields of late?

The point is a year ago there were many ways to potentially win.

Whilst it is better to have Phil King’s photo in the monthly NTA reports, the next step of removing the ugly brand name of VGI and replacing it with Regal soon is surely a no-brainer? So whilst there has been some pleasing changes in the last year, some of the decisions or lack thereof still puzzle me.

The buyback shrinking the size of VG1 significantly, which is continuing in the next year, also makes VG1 a lot more “digestible” for PGF potentially.

EXCELSIOR CAPITAL LTD – The joke where no one is laughing?

Excelsior Capital Ltd (ASX: ECL) – I have left this one for last because pretty much every shareholder except for a handful of connected ones, generally tends to vote against the board on many matters for many years.

Think that tells you something.

You can read some prior posts of mine if you care about this one here:

Excelsior Capital Ltd (ASX:ECL) – THE CURIOUS CASE OF THE LAZY BALANCE SHEET WITH FRANKING CREDITS

Excelsior Capital ECL ASX directors acting in best interest – Leanne Catelan

If you happen to hold some of these ASX dogs above good luck in the future. With some of them, it has been testing times!
 

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The Death Of Closed End Funds Or ASX LICs
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