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May 4, 2022

Activist investor calls for structural change at Glanbia

Clearway Capital wants the Irish firm to spin off consumer brands into a stand-alone entity.

By Andy Coyne

Ireland-based dairy and sports nutrition business Glanbia has been urged to separate out parts of the business by activist investor Clearway Capital.

Germany-based Clearway Capital – which bought a stake in Glanbia earlier this year – has written to the company’s board urging it spin-off consumer brands, including diet brand SlimFast, into a stand-alone entity with dual listings in the US and Ireland.

It also called for the disposal of Glanbia’s European cheese joint ventures.

Clearway suggested the moves would help near-double the Glanbia’s value to more than EUR6bn (US$6.33bn).

Glanbia comprises the Glanbia Performance Nutrition (GPN) unit, which produces sports nutrition products and brands such as SlimFast, and Glanbia Nutritionals (GN), which produces dairy and other products.

The Clearway Capital letter, dated 19 April, suggested the company’s shares were undervalued and should be trading at more than EUR21.08 a share, almost double their value on Tuesday (3 May). At 16:23 BST today, Glanbia’s share price stood at EUR11.23, down 1.19% on the day.

Clearway Capital claims the GPN unit, which had issued profit warnings, has under-performed. The investor also believes Glanbia has a confusing corporate structure and has made questionable capital allocation decisions.

Founded in 2021 by Gianluca Ferrari, Clearway Capital has run activist campaigns affecting companies in a number of sectors, including another Ireland-based food manufacturer, Greencore.

In a tweet about the letter to Glanbia’s board, Ferrari said: “I believe that there is a clear way (no pun intended) for Glanbia to drive long-term growth, create value for all of its shareholders and address its main sustainability challenges.”

In a statement sent to Just Food responding to Clearway Capital’s demands, Glanbia said: “Glanbia is committed to acting in the best interests of the company and all shareholders and stakeholders and regularly reviews its strategic priorities and opportunities to achieve its objectives and drive shareholder value. We welcome open communications with all our shareholders and have been engaged with representatives of Clearway.

“Glanbia has a clear strategy addressing key consumer health and wellness trends as a global, sustainable, purpose-led nutrition business. The business performed strongly in 2021, plans further growth in 2022 and is well-positioned to deliver on its strategic growth agenda.

“We will update the market on our current trading and outlook at our Q1 interim management statement on 5 May 2022.”

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