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July 23, 2020

Shareholder group accuses Aryzta of employing “delaying tactics” over EGM date

A shareholder group agitating for change at Swiss-Irish bakery firm Aryzta has reacted after the date of the company's extraordinary general meeting (EGM) was pushed back.

By Leonie Barrie

A shareholder group agitating for change at Swiss-Irish bakery firm Aryzta has again accused the company of using “delaying tactics” by pushing back the date of its extraordinary general meeting (EGM).

The Zurich-based firm said on Monday (20 July) it had set the date for the EGM for 16 September, a month later than the mid-August date originally put forward to its largest shareholders, Cobas Asset Management and Veraison Capital, which have been pressing for a simplified business model and a revamped board of directors.

This morning (23 July), Switzerland-based Veraison issued a statement which said: “The board of directors of Aryzta continues to relentlessly employ delaying tactics. With the breach of its previous public commitment to hold the EGM by mid-August the board is disrespecting the trust and fundamental rights of shareholders.”

Veraison said the board “has failed to set the right strategic course to focus the company and reduce the complexity of Aryzta”. 

It added: “The massive value destruction is a clear reflection of this. It is disconcerting that the strategic review announced at short notice in May 2020 by the board of directors of Aryzta has apparently failed to reach any conclusions. Rather, the sale of the company is now the apparent priority.

“This leads to unneeded confusion among employees, customers, suppliers, and other stakeholders. Apparently, the chairman and the board do not believe in the company’s future under their leadership.”

Veraison said it will reject any strategic action that lacks transparency and “believes that such actions must be reviewed by the new board elected on September 16”.

It also said it will take “any legal measures necessary” to ensure the planned EGM goes ahead on 16 September in order to “avoid further value destruction by the current board in this transitional period”. 

Aryzta has revealed that the chairman of the board and two additional board members have announced their resignations but Veraison argued that this is “not enough”.

The agitating shareholder group have proposed that three independent candidates should join the board.

“The shareholder group is convinced that Aryzta’s shares trade at a significant discount to their intrinsic value. In our view, the company operates in fundamentally attractive markets, with strong positions in its core markets. Aryzta thus has a strong potential if the company takes the right path. The independent board candidates have a clear view to focus on the core. This will reduce risks and can significantly increase value,” Veraison said this morning.

On Monday, Aryzta said the EGM had been put back “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.” 

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$926.3m today) in 2018 to bolster its capital base and has sold off a number of non-core assets to pay down its huge debt pile.

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

just-food has asked Aryzta for a response to Veraison’s latest statement.

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