Revolt at Bellamy's Claims Most of Board After Stock Price Slump

(Bloomberg) -- A shareholder revolt at baby food maker Bellamy's Australia Ltd. claimed almost every director in a one-day clean-out following a disastrous foray into China and a stock-price collapse.

Minutes before investors voted on a proposal to oust four independent directors, Chairman Rob Woolley resigned without explanation. By the end of the meeting in Melbourne, the interim chairman and another director were voted out, and another director had quit.

Two nominees from rebel shareholder Black Prince Private Foundation were voted onto the board, a Bellamy's spokesman said. Only director Patria Mann survived the cull that left the company with no chairman.

The shakeout leaves long-suffering investors little clearer on the prospects for Bellamy's, which is led by acting Chief Executive Officer Andrew Cohen. The stock has slumped about 68 percent in the past six months, after a flawed strategy that overestimated Chinese demand and saw the company rack up stockpiles of unsold infant formula.

“It's a mess,” said Daniel Mueller, an analyst at Forager Funds Management in Sydney. “It needed a changing of the guard.” The shares were halted for Tuesday's meeting.

After listing in August 2014, Bellamy's stock soared more than 15-fold in little more than a year as Chinese consumers flocked to the company's organic baby formula and food pouches for infants. After a series of share price slumps and lengthy trading halts, the Launceston, Tasmania-based company is now worth A$413 million ($317 million), down from A$1.3 billion at the end of 2015.

Bellamy's shares rose 4 percent to A$4.44 when they resumed trading on Tuesday.

Chief Executive Officer Laura McBain and Chief Financial Officer Shona Ollington stepped down last month as the company said its revenue estimates had been overambitious, largely based on Chinese demand.

According to Citigroup Inc., Bellamy's may take more than two years to clear its excess inventory and there's a risk of more product writedowns.

Daigou Channels

Acting CEO Cohen last week said he's reassessed Bellamy's marketing strategy and plans to stabilize Australian sales and pursue Daigou channels in China -- overseas buying agents for Chinese customers. Profit in the last six months of 2016 almost halved to A$7.2 million, the company reported last week.

Black Prince, together with former Bellamy's director Jan Cameron and her associated entities, own about 18 percent of the company. 

Black Prince nominees Rodd Peters and Chan Wai-Chan were voted onto the board, while Cameron's bid to become a non-executive director failed, a spokesman said. Cameron is best known as founder of outdoor equipment retailer Kathmandu Holdings Ltd.

Bellamy's had opposed Black Prince's nominees, partly because they lacked experience at a listed retailer and hadn't suggested any alternative plan.

Michael Wadley, who was interim chairman for a few minutes after Woolley quit, was voted out, as was fellow director Charles Sitch. Ex-Billabong International Ltd. boss Launa Inman resigned as a director at the start of the meeting.

To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net.

To contact the editors responsible for this story: Edward Johnson at ejohnson28@bloomberg.net, Chris Bourke