Drinks company C&C has struck a deal with activist investors that will see the company appoint a new non-executive director to the board from an agreed shortlist.
Activist investor Engine Capital wanted C&C to add directors with experience in mergers and acquisitions as well as capital markets, in part to help facilitate a “strategic review” to “monetise” the company.
Under the agreement, Engine, which has a stake of just under 5 per cent in C&C, will withdraw two nominees it had planned to put forward for election at the upcoming annual general meeting next week. It will also support all resolutions proposed at the agm in line with the board’s recommendations.
C&C shares were little changed in London.
C&C had been under increasing pressure in recent weeks. The New York hedge fund has been urging the drinks group to explore a sale, which it claimed could deliver a 58 per cent premium to the current share price.
But following engagement with Engine and other shareholders, a co-operation agreement was reached that C&C said would see the two sides “work constructively together” in the best interests of all parties. The agreement also includes governance, standstill and voting provisions.
C&C had already been mooted as a potential takeover target. Chief executive Patrick McMahon stepped down after barely a year with immediate effect in June after the firm had to restate three years of earnings amid an accounting issue that resulted in a net loss of €5 million. The company also took a €150 million goodwill writedown, driven mainly by its Magners cider unit. Chairman Ralph Findlay has stepped in to run the business for the next 12 to 18 months while a permanent chief executive is found. If Findlay was to stay in place for the full year and a half, the company would still be on its fourth boss in less than five years.
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