Aryzta activist Veraison recoups money selling more than half its shares

Veraison Capital, the Zurich activist investment firm that mounted a campaign against Aryzta in May, sold more than half of its 9.81 per cent stake in the beleaguered Swiss-Irish bakery group on Tuesday, following the completion of the boardroom coup it initiated.

The firm, led by financier Gregor Greber, disclosed to the Zurich exchange on Wednesday that it had cut its stake to 4.46 per cent the previous day, saying it had more than doubled its money since it started building up a position in the company in March.

The 53.2 million shares that Veraison sold raised 36.2 million Swiss francs (€33.6 million), based on the stock’s average price of 0.68 francs on the day of the transaction, indicating the firm has recouped its initial investment while retaining a holding worth about 30 million francs. Aryzta owns the Cuisine de France label in Ireland and supplies the likes of McDonald’s, Subway and Lidl.

However, the price at which Veraison sold down its position is below a takeover offer of 0.8 francs per share that US hedge fund Elliott Management formally tabled for Aryzta last week, valuing the business at 794.5 million francs.

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Two other activist investors behind an Aryzta board overhaul completed at an annual general meeting on Tuesday, Spain's Cobas Asset Management and Lodbrok Capital, have already come out against the Elliott offer, saying it undervalues the business.

Reject the bid

In addition, the company's new chairman, Urs Jordi, who Veraison had pushed through at an extraordinary general meeting in September, is widely expected to preside over a board decision in the coming weeks to reject the Elliott bid. Mr Jordi has been clear since the outset that he sees greater value for Aryzta investors by the company remaining on the stock market and selling off non-core assets to reduce its €1 billion net debt and simplify the business.

Market sources said that Veraison’s stake sell-down is typical of the opportunistic approaches it takes to investing in companies and that allows for longer-term investors to come on board.

“We continue to believe that a successful transformation of Aryzta should lead to a significantly higher mid-to-long term value of Aryzta,” said Swiss brokerage Baader Helvea in a note to clients. “We would recommend Aryzta only to longer term oriented investors with an ability to take risks [for potential high returns].”

The short-term presents risks relating to Covid-19, asset disposals and further restructuring measures, it said.