Aryzta activist investors seek to continue board overhaul

Cobas, Lodbrook propose not to re-elect four members to board of Swiss-Irish food group

The four directors being targeted by Cobas and Lodbrok were part of a board that entered into talks in  September aimed at selling the business to US hedge fund Elliott Management.

The four directors being targeted by Cobas and Lodbrok were part of a board that entered into talks in September aimed at selling the business to US hedge fund Elliott Management.

 

Two activist shareholders with a combined 12.4 per cent stake in Aryzta are pressing for a continuation of a boardroom overhaul, proposing the removal of four established directors at the baked goods group’s upcoming annual general meeting (agm) in December.

It emerged two weeks ago that there were clear divisions over strategy between three new directors, appointed in September as part of a boardroom coup, and four of the five remaining non-executives.

Aryzta’s largest shareholder Cobas Asset Management, which owns 9.4 per cent of the company, and 3 per cent shareholder Lodbrok Capital are proposing resolutions at the agm that investors do not e-elect Mike Andres, Greg Flack, Jim Leighton and Tim Lodge to the board.

Cobas was involved in the September shake-up that saw Urs Jordi take over as chairman from Irish corporate grandee Gary McGann. Lodbrok, which also owns €260 million worth of subordinated bonds in Aryzta, is also backing the addition of two new members to the board, Gordon Hardie, who is also a non-executive director of Greencore, and Jörg Riboni.

Targeted

The four directors being targeted by Cobas and Lodbrok were part of a board that entered into talks in early September aimed at selling the business to US hedge fund Elliott Management. Those negotiations fell through late last month.

Mr Jordi, the two other directors voted in by shareholders in September, and Cobas’s representative on the board, Legarda Zaragueta, were against an outright sale and keen to pursue individual asset disposals. The group’s troubled North American business is believed to be high up on the asset-sales list.

Andreas von Arx, an analyst with Baader Helvea in Switzerland, said it is natural that the larger shareholders are proposing to “remove those board members that seem to have a different view on the future strategic direction than their recently elected chairman”.

It is understood Cobas said in a letter to Aryzta, in which it made its agm resolution proposals, that the four established directors were part of a board that raised €800 million in equity sale in late 2018, which failed to revive the company’s fortunes.

Cobas also said the four backed what it believes to be flawed strategic review this year that resulted in decision to pursue a sale of the business to Elliott Management.