Aryzta to pursue asset sales as takeover talks fail

Company says discussions with Elliott Advisors have concluded without binding offer

Aryzta posted a €1.09bn  net loss for its financial year through July. Photograph: iStock

Aryzta posted a €1.09bn net loss for its financial year through July. Photograph: iStock

 

Aryzta is set to start engaging with parties circling assets within the embattled baked goods group after confirming on Saturday that talks on a potential outright takeover by a unit of US activist hedge fund group Elliott Management had failed.

The Swiss-Irish company said discussions with Elliott Advisors, first announced in early September, had concluded without a binding offer.

The group’s new chairman Urs Jordi, who was known to be against a sale, said in a statement that the company would outline plans to “implement the necessary changes to deliver sustainable improvement” at the company’s upcoming agm.

The Irish Times reported last week that Aryzta had received approaches from close to 20 parties interested in parts of the company’s operations after an extraordinary general meeting (egm) in mid-September resulted in Mr Jordi and two other directors joining the board as part of a coup orchestrated by a group of dissident shareholders.

The new directors were keen to engage with potential bidders for parts of the business – including its troubled North American business – but could not proceed as long as Elliot continued to enjoy exclusivity, sources said. A number of extensions to the exclusive talks had been granted, with the last one running out in recent days.

Aryzta posted a €1.09 billion net loss for its financial year through July, driven by €988 million of impairment charges against assets, mainly in its troubled North American operation, and losses on businesses being sold, it said earlier this month.

The result was also affected as sales, especially to catering customers, slid amid widespread Covid-19 lockdowns earlier this year, resulting in underlying earnings before interest, tax, depreciation and amortisation (Ebitda) dropping 15.4 per cent to €260 million.

Aryzta said last week that it was postponing its agm, due to take place in Switzerland on November 11th, in order to give it “further time to evaluate the available range of strategic and financial options”.