Dissident shareholders threaten legal action against Aryzta

Group says it will act to ensure extraordinary general meeting proceeds in September

Dissident shareholders at Aryzta have threatened legal action against the Swiss-Irish food group to ensure a planned extraordinary general meeting goes ahead in September.

Activist shareholders led by Swiss group Veraison have stepped up their campaign for change at Aryzta, accusing the company of delaying tactics and "disrepecting the trust and fundamental rights of shareholders".

The extraordinary general meeting, which was requested by the shareholders on May 20th, will take place on September 16th, and the Veraison-led group said it was prepared to take legal action to ensure it proceeded to avoid any further “value destruction” by the current board.

“The board of directors of Aryzta continues to relentlessly employ delaying tactics,” Veraison said in a statement. “With the breach of its previous public commitment to hold the extraordinary general meeting by mid-August, the board is disrespecting the trust and fundamental rights of shareholders

“Since 2017, the current board of directors has failed to set the right strategic course to focus the company and reduce the complexity of Aryzta. The massive value destruction is a clear reflection of this,” it added.

Dublin-listed Aryzta, which owns the Cuisine de France and Otis Spunkmeyer labels, has been struggling to halt a decline in earnings, particularly in the United States, and negative investor sentiment towards its complex capital structure.

The investors, led by Veraison and Aryzta’s largest investor, Cobas, are seeking to oust chairman Gary McGann and four other directors in a bid to reverse the decline in shareholder value, which is down more than 85 per cent since late 2018.

Aryzta said this week that it had received approaches from a number of unsolicited parties interested in taking over the group. Mr McGann has announced that he will step down if a deal has not been struck by September 16th.

The shareholder group criticised the strategic review announced in May by the board, which, it said, had failed to reach any conclusions.

“Rather, the sale of the company is now the apparent priority. This leads to unneeded confusion among employees, customers, suppliers, and other stakeholders. Apparently, the chairman and the board do not believe in the company’s future under their leadership,” Veraison said.

The shareholder group said it would reject any strategic action that lacks transparency and said such actions must be reviewed by the new board elected on September 16th. It also pushed for further change at board level.

“In our view, the company operates in fundamentally attractive markets, with strong positions in its core markets. Aryzta thus has a strong potential if the company takes the right path,” Veraison said.

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