Bakery group Aryzta's new board confirmed on Friday evening it was rejecting a €734 million takeover offer from US hedge fund Elliott Management and that it was putting it businesses in North and Latin America on the market to simplify itself and cut debt.
The decision to turn down the bid had been largely expected after a boardroom coup, which began in September, was completed this week at the company’s annual general meeting near Zurich.
The Swiss-Irish company's new chairman, Urs Jordi, had been clear since joining the board three months ago that he sees greater value for Aryzta investors in the company remaining on the stock market and selling off non-core assets to reduce its €1 billion net debt and focus the business.
Elliott had been courted by the old board, led up until the middle of September by chairman Gary McGann. However, the US firm only made a formal offer this month.
“Aryzta has had a tumultuous few years. It is clear from the feedback from all our stakeholders – shareholders, customers, suppliers, lenders, and employees – that it has been a painful, uncertain and destructive period for all,” the company said.
“The newly formed board is committed to bringing this chapter in Aryzta’s history to a close.”
Aryzta, which owns the Cuisine de France label in Ireland and supplies the likes of McDonald's, Subway and Lidl, will focus on the European and Asia Pacific markets and sell its businesses in both North and Latin America, it said. The company had previously said that it aims to raise between €600 million and €800 million from disposals.
“Our engagement with interested parties for these businesses is progressing well and we have already communicated this to our key customers in these regions,” it said.
The company also said that it plans to cut central overhead costs for the remaining business by 25 per cent by the end of 2021.
“The process to remove central costs has already started as we simplify operations and make local and country management responsible for all their costs and profit delivery targets,” it said.
Mr McGann, who took over as chairman of an already embattled Aryzta in late 2016, subsequently presided with the chief executive he brought in, Kevin Toland, over the raising of €400 million from asset sales an almost €800 million the issuance of new shares.
However, Aryzta’s problems have persisted, with Covid-19 hitting business in 2020.
Aryzta posting a €1.09 billion net loss for its financial year to the end of July. This was driven by €988 million in impairment charges against assets, including its troubled North American operation. Mr Toland left the company late last month.