Aryzta shares soar on deal to sell most of Picard stake

Cuisine de France owner agrees €156 million sale of 43% stake in French frozen foods firm

In a statement on Friday, Aryzta, which is the maker of Cuisine de France, said it had received a binding offer.

In a statement on Friday, Aryzta, which is the maker of Cuisine de France, said it had received a binding offer.


Swiss-Irish baked goods group Aryzta’s shares soared on Friday as it agreed to sell most of its stake in French frozen foods company Picard, which has been on the market for more than 2½ years.

Aryzta, which is the maker of Cuisine de France breads and pastries in the Republic, acquired a 49 per cent interest in Picard in early 2015 for €447 million. In a statement on Friday, it said it received a binding offer from Invest Group Zouari (IGZ), a French firm, to sell the majority of its interest in Picard.

The deal involves IGZ paying €156 million for a 43 per cent stake. Aryzta said that when combined with special dividend income of €91 million received from Picard in recent years, the deal represents a total value of €247 million. Aryzta said it will retain a 4.5 per cent in Picard, which will be sold at a later stage.

The sale of the stake in Picard, which specialises in high-end frozen foods, follows a troubled period for Aryzta, best known for making McDonald’s burger buns. The original purchase of the stake from private equity group Lion Capital has been seen by analysts as the beginning of a loss of investor confidence in the group.

Aryzta would go on to post a series of profit warnings and disappointing earnings, as a result of problems elsewhere in the group, especially the US, prompting a management overhaul in 2017, an €800 million emergency share sale last year, and round of asset sales to lower group debt.

Shares in Aryzta roses as much as 16 per cent in Zurich on Friday as the market reacted to the Picard deal.

“Overall, this announcement should be well received by the market, particularly given the weakness in the stock – of about 35 per cent year-to-date – as it finally monetises this non-core asset which has been for sale for an extended period of time,” said Jason Molins, an analyst with Goodbody Stockbrokers.

Aryzta said that net proceeds from its non-core asset disposal programme represent €380 million including the sale of the Picard stake.

Chief executive Kevin Toland, who took over as chief executive two years ago, has also presided over the sale of Irish restaurant supplier La Rousse, the group’s troubled Cloverhill Bakery facilities in Illinois, and its 50 per cent stake in British naan bread firm Signature Flatbreads.

‘The binding offer from IGZ for our interest in Picard represents the earliest practicable opportunity to realise the maximum deliverable value for Aryzta,” said Mr Toland. “On completion of this transaction, Aryzta will realise some 85 per cent of its asset-disposal objective. The steps we have taken in 2019 have established clear foundations on our path towards stability, performance and growth.”

Aryzta is scheduled to announce its full-year results on October 8th.