ARYZTA, the Swiss-Irish bakery firm in the middle of a strategic review, said it has received “unsolicited interest” in the business from third parties as it announced the timing of an extraordinary meeting called for by agitating investors.

The Zurich-based firm said this morning (20 July) it has set the date for the EGM for 16 September, a month later than the mid-August date originally put forward to Cobas Asset Management and Veraison Capital, Aryzta’s two largest shareholders, which have been pressing for a change in business model and a revamped board of directors.

While Spain-based Cobas and Veraison of Switzerland, which together hold 20% of Aryzta’s shares, might be disappointed by the delayed timing of the EGM, the company today also revealed three of the four board members the investors have called to be removed will step down.

“The proposed [EGM] timing is primarily intended to provide an opportunity to allow the strategic review process in which certain third parties have expressed an unsolicited interest in acquiring the company’s entire issued share capital to be sufficiently advanced to enable the board of directors to frame an appropriate recommendation with the advice of its financial advisors,” Aryzta said in a statement. “The proposed timing also reflects a desire to avoid further instability consequent upon the economic impact of Covid-19.”

In April, Aryzta hired France-based investment bank Rothschild & Co. to review strategic options for the business, which has been struggling financially of late, particularly in North America, one of its two key markets along with Europe. The company raised EUR800m (US$915.6m today) in 2018 to bolster its capital base and has sold off a number of non-strategic assets to pay down its huge debt pile.

But Cobas and Veraison have recently called for a further EUR600m in asset disposals.

Still, Aryzta added today that board members Dan Flinter and Rolf Watter have declared their resignations from the board “effective as at the conclusion of the EGM”.

And board chairman Gary McGann “has indicated that he will step down as chair and board member effective as at the conclusion of the EGM unless, prior to the date of the EGM, the company has announced a transaction for shareholder consideration which the board considers to be in the best interests of Aryzta and all of its stakeholders (having been so advised by its financial advisors)”.

Cobas and Verasion have also called for the removal of a fourth board member, Annette Flynn but she looks likely to remain.

In a separate letter to shareholders, Aryzta said: “As chair of the audit committee, Annette Flynn has a vitally important role to play as the company makes its way through these challenging circumstances and the board rejects the proposal to remove her as a director. Annette brings experience, continuity and diversity of thought and is an important member of the board.”

Arytza chief executive Kevin Toland, who Cobas and Veraison have asked to step down from the board so he can focus entirely on his CEO role, also looks set to stay.

Aryzta added in the letter: “On the proposal to remove the CEO … the board believes it is fundamentally important that he remains … Having the CEO as a member of the board allows for appropriate management representation on the board, together with a direct and immediate information exchange between the board and management.

“The leadership of Kevin Toland is vital to the future of the company and any diminution in his role and authority is considered by the board to be contrary to the best interests of the company and all of its stakeholders.”

The investors have nominated food industry veteran Urs Jordi as chairman, along with Armin Bieri and Heiner Kamps to be appointed to the board.

Jordi is a former head of Aryzta’s European division and the ex-CEO of Hiestand Holding, the business that merged with IAWS Group plc in 2008 to form Aryzta.

Aryzta said in the letter to shareholders it is “willing to support the nomination of up to two new members for election to the board, provided such individuals have suitable qualifications and experience. We have asked the shareholder group to submit their nominees for evaluation in accordance with the company’s established governance process for the
nomination of new members for election to the board.”

See just-food’s analysis: Is outright sale of Aryzta the ultimate solution to debt woes?