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December 7, 2020

Aryzta gets “conditional offer” from Elliott as it sells pizza asset in North America

Aryzta has said takeover talks have moved to another stage as the European bakery business announced an asset sale in North America.

By Dean Best

Aryzta’s talks with US fund Elliott Management over a possible takeover of the debt-ridden European bakery business appear to have progressed, with a “conditional offer” now on the table.

Meanwhile, Aryzta, which has been struggling to drive momentum behind its sales and profits and cut a substantial debt pile, announced the sale of its take-and-bake pizza business in North America to US-based private-equity firm Brynwood Partners.

The Zurich-headquartered company, which is listed in both Switzerland and Ireland, said in a statement this morning (7 December) its board will “carefully consider the offer in accordance with its fiduciary duties and processes in due time” ahead of its annual general meeting on 15 December.

Last month, Aryzta revealed the New York-based US investor, through its Elliott Advisors (UK) arm, made a “proposed bid” for the bakery firm in a “non-binding letter” of intent at CHF0.80 (89 US cents) per share, the same price as the new proposal now lodged. A report in the Irish media said the offer price now on the table would represent a total value of EUR734m (US$887.9m).

In October, Aryzta had said previous talks with Elliott Advisors had concluded without any offer being made amid a drawn out process with the company’s main shareholders and the firm’s management to come up with proposals to simplify the business and turn around its financial performance, particularly in North America where it has been struggling for some time.

Last month, it was revealed CEO Kevin Toland had left the bakery business, which supplies the retail and foodservice channels, including buns to fast-food chain McDonald’s. No reason was given for his departure. Toland had instigated, and proceeded with, a programme to dispose of non-core assets. But two key shareholders – Cobas Asset Management and Veraison Capital – had been calling for more.

In a simultaneous statement today, Aryzta said terms and conditions for the pizza asset disposal to Brynwood were not being disclosed. Earlier in December, the company had said it planned to “restructure its business model into a multi-local, lean and agile structure” in an effort to “reduce complexity and overhead costs”. 

A company spokesperson confirmed the take-and-bake operation manufactures and supplies the retail channel with pizza that consumers can bake at home but would not reveal any further information in terms of sales or locations.

Two other departures were also announced this morning “as part of these restructuring plans”, the company said. Two executive committee members, chief people officer Tony Murphy, and John Heffernan, the president and chief commercial officer for North America, “have ceased their roles with immediate effect and will not be replaced”.

Aryzta is currently headed by board chairman Urs Jordi as it seeks a replacement for Toland.

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