Forum Topics DDR DDR Management

Pinned straw:

Added 7 months ago

David Dicker has left the building...https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02947520-2A1596991&v=7bc42bd11d853ed5e8c28f2ffcd6a069ee5cd6b4

This is not a surprise as he has been edging out the door to spend more time on hobbies for a while now.

A few things about this announcement seem a little odd tho

Timing - Doesn't say when this is effective. I assume this is immediate and if so this seems sudden. He's not a young man so could be health related. Didn't give a reason except "to pursue other interests". Their AGM is next week, so not sure who will be there for it - I assume Fiona a new Chair will run it but David may Zoom in from Dubai like last time? Results haven't been great recently and 2025 was supposed to be a better year, maybe not?

Succession - seems obvious but no mention of who (if anyone will be the new CEO). Has to be Vlad, the current COO. Unless he says no for whatever reason, I can't think of anyone who could possibly be better. No mention of a process to find a CEO.

Shareholding - no commitment for escrow of David's 50% holding (including his effective control over Fiona's holding).

Will need to see what's said at the AGM which will be IRL only I believe so should be well attended and more interesting than usual...

Karmast
Added 7 months ago

I'm not surprised @Slomo and @thunderhead either.

That said timing of announcement and questions it leaves are less than ideal. Who knows how the market reacts on Monday. The question for me though - is this a better business without David?

My answer would be no as while I like Vlad and his bulldog approach, the rest of the Board is pretty soft, meaning he is probably going to be unconstrained and possibly takes too many risky bets now.

In addition if David starts to sell down more to fund his other passions, thats a lot of downward pressure on share prices for quite some time.


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Solvetheriddle
Added 7 months ago

@Karmast not worried about any sell down, its ST and will clear at a price then BAU. having said that, I would be much more relaxed if DD keeps his shares as a counter to your next point. I am worried about the soft board and unconstrained Vlad.

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Karmast
Added 7 months ago

Hopefully your right @Solvetheriddle

I think David still owns about 17% of the shares, worth about $250 million right now. My thinking was he'd sell down over time to try and get the best price rather than find one big buyer that would take it all but that's just a guess. Owning a prospective Formula 1 team isn't cheap!

On the other hand maybe he keeps most of the holding so that he can keep the dividends rolling in...fingers crossed.

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Slomo
Added 7 months ago

@Karmast I expect the possibility of Dicker Data being taken over is a lot higher now (Ingram Micro looked at them in 2016 I believe).

I can imagine David wanting to block any approach in the past so he could milk the cash flows via their 100% payout ratio policy.

He may now prefer to take his winnings in a lump sum rather being than drip fed, especially now he can no longer (in theory) control the dividend payout policy.

After the last AGM I felt and wrote here than 100% payout feels rusted on while David remains on the board.

Having suddenly exited CEO, Chair and board positions in one swift movement, he looks to have lost a lot of influence - unless he somehow still controls Fiona's shares (odd arrangement that).

If he was trying to orchestrate a takeover, doing that from his old role would be a lot easier I would expect but DDR has to now be a better target for an industry that is still consolidating.

Shares look cheap to me today so may look even cheaper to a strategic acquirer?

AGM should be interesting on Wednesday, are you going?

Disc: Held

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Karmast
Added 7 months ago

Yes good call @Slomo and that could certainly be in play now. Will be an interesting AGM but sadly I can't make it this year, so hopefully you can provide an update here afterwards.

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thunderhead
Added 7 months ago

While it is always a bummer to see a founder-operator of such vintage leave the company he established and grew, it seemed to be in the works for a while given the growing time he spent on his other interests, and significant share sales in recent years.

Investors can take confidence in an established and long standing second-in-line executive team, who are all well-aligned with investors. He will also stick around for six months as a consultant, so the departure is not going to be as abrupt as it seems.

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thunderhead
Added 7 months ago

Oh yeah, the timing of the announcement stinks from an optics perspective. After close of market on a Friday, the classic "slip in the news when noone's paying attention" kind of vibe.

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